Bitcoin’s gains have been fuelled by signs it is gaining acceptance among mainstream investors and companies, from Tesla Inc and Mastercard Inc to BNY Mellon . — Reuters picNEW YORK, Feb 20 — Bitcoin hit a market capitalization of US$1 trillion as it rose to yet another record high yesterday, countering analyst warnings that it is an “economic side show” and a poor hedge against a fall in stock prices.
“If you look at gold, it has a market cap of US$9 or US$10 trillion. Even if bitcoin gets to half of gold’s market cap, that’s still growth of 4X, or US$200,000. So I don’t know when it stops rising,” he added. Still, many analysts and investors remain skeptical of the patchily regulated, highly volatile digital asset, which is little used for commerce.
Bitcoin is an “economic side show,” it added, calling innovation in financial technology and the growth of digital platforms into credit and payments “the real financial transformational story of the Covid-19 era.” Bitcoin proponents argue the cryptocurrency is “digital gold” that can hedge against the risk of inflation sparked by massive central bank and government stimulus packages designed to counter Covid-19.