Bitcoin scaled new heights above $52,800 on Friday morning, taking its year-to-date gains to 80% as the breakneck rally powered ahead.
The price increase took bitcoin’s market capitalization to within touching distance of $1 trillion, at more than $980 billion. The world’s biggest cryptocurrency has added more than $400 billion of value just in 2021.
Bitcoin (BTC) traded at $52,657 as of 6.10 a.m. ET, having risen around 2.3% over the previous 24 hours. It earlier touched a high of $52,899 on the Coinbase exchange.
Elon Musk’s Tesla triggered the latest climb higher, after it revealed earlier in February that it had bought $1.5 billion of bitcoin in January and intended to accept it as payment.
Musk on Thursday night defended Tesla’s move, calling bitcoin “a less dumb form of liquidity than cash.” He tweeted: “When fiat currency has negative real interest, only a fool wouldn’t look elsewhere.”
Underlying the rally, analysts say, are the huge amounts of stimulus governments and central banks have funneled into economies during the coronavirus crisis which have lifted nearly all markets.
Many BTC advocates expect inflation, and say the cryptocurrency is a good asset to hold if price rises start eroding the purchasing power of the dollar.
Some other big-name companies have started to sniff around bitcoin in recent weeks, adding legitimacy to the rally.
“People are looking for places that could appreciate under the assumption that inflation moves higher and that debts are building, so we’ve started to dabble a bit into it,” he added.
Yet not everyone is convinced. NYU economist Nouriel Roubini on Wednesday told Bloomberg that he thinks bitcoin “is a bubble.”
He said: “Fundamentally, bitcoin is not a currency. It’s not a unit of account, it’s not a scalable means of payment, and it’s not a stable store of value.” He said that “the Flintstones had a better monetary system than bitcoin.”