Bitcoin advanced for a fourth day, pushing the digital asset’s market value back above $1 trillion, amid surging optimism in financial markets.
The world’s largest digital asset rose as much as 5.2 per cent before trading around $57,000 as of 12:23 p.m. in New York. It passed $1 trillion for the first time in February on its way to a record high of $58,350.
The gain comes even as a key measure of U.S. consumer prices rose less than expected in February, suggesting broader inflationary pressures remain tame. Bitcoin proponents have championed the digital asset as a hedge against a future surge in inflation.
While the $1 trillion mark is noteworthy, the argument has been made that assigning a market capitalization isn’t an accurate representation since Bitcoin isn’t a company or even an asset. Skeptics say without real-world assets that companies possess or government backing like the dollar, all investors are really buying into is faith in the cryptocurrency’s network.
Ether — the world’s second-largest cryptocurrency — advanced as much as 3 per cent. The gains mirror broader risk-on optimism after the Nasdaq 100 Index that rebounded this week from an earlier decline that pushed it into correction territory.
Bitcoin advocates argue that the digital asset is a store of value that can be used as a hedge against inflation and a weaker dollar as fiscal and monetary support flooded financial markets with liquidity over the past year. Detractors maintain that the cryptocurrency is in a stimulus-fueled bubble likely to burst.