Bitcoin market value hits $1trn

The cryptocurrency's returns far outstrip the performance of more traditional assets like stocks and gold.

Bitcoin’s market value reached $1trn (€830bn) for the first time, a surge that’s helping cryptocurrency returns far outstrip the performance of more traditional assets like stocks and gold.

The largest token has added more than $450bn of value in 2021.

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

At the same time, the argument has been made that assigning a market capitalisation isn’t an accurate representation since Bitcoin isn’t a company or even an asset.

Gold, meanwhile, began the year with lofty expectations on the back of a record high and its biggest annual gain in a decade. Instead, the precious metal is off to its worst start in 30 years.

Spot prices have now touched a seven-month low and bullion is already down about 6% this year.

Still, some see prospects for gold to make a comeback, betting the inability of governments and central banks to normalise stimulus policy will support the metal. 

Goldman Sachs said in late January that with prospects for additional stimulus and Federal Reserve interest rates on hold, the metal “remains a compelling investment for the medium-to long-term investor”.

“At the end of the year, we now see gold at $2,000 per ounce.” Commerzbank said.

• Bloomberg