Bitcoin is back near $40,000 on the heels of a global market rally as investors grow increasingly confident in reflation and fresh U.S. stimulus.
The world’s largest cryptocurrency was up 1.1% to $39,012 as of 9:57 a.m. in London after briefly surpassing $40,000 on Saturday. It’s now about 7% below an all-time high set in early January.
After a brief dip this month, Bitcoin is climbing once again as enthusiasts tout the digital asset as a hedge against inflation and store of value in a world awash with stimulus and rampant central-bank money printing.
Prominent economists including Lawrence Summers have recently raised concerns that President Joe Biden’s $1.9 trillion virus relief package may risk overheating the economy.
Bitcoin’s free float, a measure of how many tokens are available to trade, has fallen to 13% of supply, the lowest since 2014, according to Chainanalysis. “This suggests that Bitcoin available to buy remains scarce despite record prices,” wrote Philip Gradwell, chief economist at the blockchain research firm.
It’s also possible that cryptocurrencies are benefiting from all the free publicity from celebrities lavishing attention on Dogecoin, a Shiba-Inu themed joke coin. Over the weekend, Billionaire Elon Musk, rapper Snoop Dogg and Kiss bassist Gene Simmons sent several Dogecoin tweets and memes, pushing prices to a record.
Dogecoin rose as high as 8.2 U.S. cents before falling back to about 7 cents, according to pricing data from CoinGecko. The token has a market value of about $9 billion, making it the 10th biggest cryptocurrency.
In Bitcoin, famed fund manager Bill Miller extended his endorsement by reserving the right for his Miller Opportunity Trust to invest in the Grayscale Bitcoin Trust, a vehicle that institutions use for Bitcoin exposure, according to a U.S. regulatory filing.
“If retail and institutional interest continues to grow over the next month, Bitcoin could target the $45,000 level,” said Edward Moya, a senior market analyst at forex broker Oanda Corp.