Bitcoin’s market capitalization surpasses $ 1 trillion after tripling in three months
Bitcoin’s market capitalization topped $ 1 trillion for the first time, representing a growth of more than 900% in less than a year. Bitcoin has reached new all-time highs above $ 53,700, causing its market capitalization to exceed $ 1 trillion for the first time.
Bitcoin’s late 2020 rally appeared to be sparked by an unprecedented wave of demand from institutions and billionaires, with the trend set after the world’s largest publicly traded business intelligence company MicroStrategy revealed that it had converted $ 250 million from its treasury in BTC on August 11.
By the end of January 2021, MicroStrategy had invested $ 1.095 billion to accumulate 71,079 BTC or 0.38% of the circulating supply of Bitcoin. In early February, the company hosted a free webinar that provides strategies for incorporating Bitcoin into corporate treasury reserves, and MicroStrategy is currently in the process of raising an additional $ 900 million to buy more BTC.
Institutional asset manager Grayscale also aggressively increased its Bitcoin accumulation during 2020, with its Bitcoin Trust reporting an 872% increase in assets under management from $ 1.8 billion at the beginning of the year to $ 17.5 billion in early January. To date, Grayscale has bought Bitcoin at a rate that is faster than creating a new supply of BTC.
On February 8, the news that Tesla CEO Elon Musk had invested $ 1.5 billion or 7.7% of the electric vehicle maker’s treasury in BTC sent the price of Bitcoin skyrocketing to new all-time highs above $ 43,000.
And bullish institutional news keeps pouring in, with rumors suggesting that Twitter may become the next big company to add Bitcoin to its balance sheet, and megabanks like BNY Mellon and Deutsche Bank announce moves to introduce BTC custody services. Major funds like BlackRock and Morgan Stanley are considering whether an investment in Bitcoin is justified.
The $ 1 trillion milestone comes after 12 months of extreme volatility for Bitcoin, with BTC’s capitalization increasing by more than 10 times since the depths of the “Black Thursday” collapse in March 2020.
Amid the growing threat of the coronavirus pandemic, former United States President Donald Trump introduced a travel ban from Europe to the United States on March 11, and many nations around the world entered total lockdowns. .
The mounting panic caused chaos in the cryptocurrency and legacy financial markets, as the price of Bitcoin plunged more than 50% on March 11 to less than $ 4,000 by March 13, prompting wholesale sell-offs in the leveraged exchanges. On March 13, the market capitalization of Bitcoin was below $ 100 billion for the first time since May 2019.
Despite the carnage, opportunistic buyers constantly pushed prices up as they racked up in anticipation of the Bitcoin third block reward halving in May 2020. BTC briefly recovered $ 10,000 during May after it was revealed that the renowned manager Hedge fund billionaire Paul Tudor Jones had invested in BTC as a hedge against inflation.
While the third quarter 2020 DeFi bull market and excitement over Ethereum’s Eth.2 review would steal BTC’s attention, many of the gains made from the DeFi boom quickly appeared to make their way into Bitcoin, with BTC topping the low $ 12,000 at the end of October. It tested its all-time highs since 2017 towards the end of November after PayPal launched crypto trading services in the United States.
Due to its highest offering since 2017, Bitcoin registered a new record market capitalization on November 18, with BTC’s capitalization surpassing $ 326.5B for the first time, its price surging past $ 18,000.
Since then, Bitcoin’s market capitalization has more than tripled in roughly three months, with BTC’s December push towards new all-time price highs propelling the rally into high gear.
It took Bitcoin just 12 years to grow from an obscure academic scholarly paper to a $ 1 trillion decentralized network, becoming the eighth tradable asset that currently boasts a thirteen-figure market capitalization. By contrast, it took Microsoft 45 years for its capitalization to exceed $ 1 trillion. Amazon took 27 years and Google hit the $ 1 trillion mark in just 22 years.
Now the question is, how long will it be before Bitcoin approaches the market capitalization of gold?
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