The world’s largest digital currency, with a market value of more than $ 900 billion, reached a record high of $ 51,175, supported by signs that it is gaining acceptance among investors and major companies, such as: Tesla and MasterCard.
Despite the prevailing wave of acceptance this year, some analysts have warned that Bitcoin is still far from becoming a widely used payment method.
Mark Haefele, chief investment officer at wealth management company UBS, said: “We advise investors not to view this as a mainstream cryptocurrency moment, and we advise caution before engaging in speculation as crypto is not a currency.”
He added: We also don’t think that platform companies with existing internal payment systems might jump into the crypto space.
Bitcoin has increased eightfold since last March, and has added more than $ 700 billion in market capitalization since September.
Investment banking firm JPMorgan questioned the size of the jump on the back of a total inflow of just $ 11 billion from institutional investors.
JPMorgan analysts said: The limited supply of Bitcoin – based on the two metals – has led its holders to impose a premium on Bitcoin on the market, and that retail flows may have increased the size of institutional flows.
“We have watched closely the apparent imbalance between supply and demand over the past two months as there has been a significant spike in institutional interest,” said Brian Melville, director of strategy at Cumberland, the crypto arm of DRW trading in Chicago.
However, the prices of the major digital currency are not sustainable unless its volatile price fluctuates rapidly, said JPMorgan analysts, who last month pointed to the emergence of Bitcoin as digital gold.
They said: Bitcoin, at current market prices, has more than doubled compared to gold in terms of risk capital, noting the volatility of the digital currency for three months, at 87 percent compared to 16 percent for gold.
Separately, US securities firm Wedbush said it sees less than 5 percent of public companies heading toward a Bitcoin investment path in the next 12 to 18 months.