Bitcoin Nears $1 Trillion Value

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In a surge that is helping cryptocurrency returns outsrtip the performance of stocks and gold, Bitcoin is closing in on a market value of $1 trillion.

Data compiled by Bloomberg show that Bitcoin has added more than $415 billion of value in 2021 to about $956 billion.

Also, the Bloomberg Galaxy Crypto Index, which includes Bitcoin and four other coins, has more than doubled.

Speculators, corporate treasurers and institutional investors are thought to be behind Bitcoin’s volatile ascent.

Crypto believers are dueling with skeptics for the dominant narrative around the climb: the former see an asset being embraced for its ability to hedge risks such as inflation, while the latter sense a precarious mania riding atop waves of monetary and fiscal stimulus.

FOMO — fear of missing out — may be at play, said Shane Oliver, head of investment strategy with AMP Capital Investors Ltd. in Sydney, adding that “in times of easy money this gets magnified and it’s partly what’s driving the current interest.”

Bitcoin traded at around $51,300 as of 1:30 p.m. on Friday in Hong Kong after quintupling in the past year. The crypto index’s performance towers over stocks, gold, commodities and bonds in 2021.

This month, Tesla Inc. disclosed a $1.5 billion investment and MicroStrategy Inc. boosted a sale of convertible bonds to $900 million to buy even more of the token. That brought the coin closer to corporate America.

Tesla Chief Executive Officer Elon Musk posted a somewhat cryptic tweet Friday that appeared in part to defend the company’s action, saying Bitcoin “is simply a less dumb form of liquidity than cash” while adding that the electric vehicle maker’s decision isn’t “directly reflective of my opinion.”

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