Bitcoin’s incredible rally shows little sign of abating yet after the token jumped past $52,000 for the first time.
The largest cryptocurrency was little changed in Asian trading Thursday at about $52,100 after a fivefold surge in the past year
For some, Bitcoin’s rally is a result of the speculative froth in financial markets awash with stimulus.
The crypto faithfuls counter that the digital asset is grabbing more mainstream attention, especially after Tesla Inc.’s recent $1.5 billion purchase.
MicroStrategy Inc. boosted its convertible debt sale to buy Bitcoin by nearly half to $900 million and cut the coupon to 0%, making it virtually a straight bet on the price of the cryptocurrency.
Others take a different view, contending that demand from institutional investors and companies is set to expand, driving further gains.
Activity in Bitcoin futures suggests traders don’t see a sudden end to the crypto rally, with spreads continuing to widen between the active contract and March futures, according to data compiled by Bloomberg.
Shares of Asian crypto-linked companies have advanced, too. Japan’s Monex Group Inc. jumped 11% to hit a 13-year high on Wednesday, while BC Technology Group Ltd. in Hong Kong closed at a record. Both stocks were down Thursday in Asia, though.
JPMorgan Chase & Co. strategists said Bitcoin’s volatility needs to ease to prevent its rally from fizzling. Other commentators see a mania likely to end in a bust akin to the implosion in 2017.
The digital coin’s 60-day realized volatility is around the highest since May last year, though still below the levels seen around the peak of its last boom some three years ago.