Bitcoin, the world’s oldest and largest cryptocurrency, has again surpassed a market capitalisation of $1 trillion (roughly Rs. 74,73,650 crores). Backed by a favourable investors’ sentiment, the crypto coin has also moved past the $50,000 (roughly Rs. 37.38 lakhs) value. The recent rise in Bitcoin price is largely due to investors being skeptical about the stock market, crypto experts say. Many investors remain wary of October, a month when the worst market crashes in US history have happened, including the 2008 economic meltdown. The m-cap of a cryptocurrency is calculated by multiplying the current price of the coin and the number of coins in circulation.
The increase in Bitcoin’s m-cap means the number of the coin in circulation has also risen, that is more people are investing in it than in the recent past. Most of these investors are likely to be those who want to reduce their exposure to stocks and move to a relatively safer investment environment. Also last year, Bitcoin began its surge in October. Some feel Bitcoin is likely to repeat its wild fourth-quarter rally again this year.
Bitcoin price in India was around Rs. 40.36 lakhs (roughly $54,000) at the time of writing this report. Bitcoin previously surpassed the $1 trillion m-cap in February this year, when it had begun its rapid surge and crossed the $50,000 mark for the first time. It touched an all-time high of around $64,000 (approx. Rs.47.84 lakhs) in April. In early May, the cryptocurrency market crashed and Bitcoin lost all its gains this year, going below the $30,000 mark (approx. Rs. 22.42 lakhs).
Until the crash, Bitcoin had maintained an m-cap of above $1 trillion. For comparison, Microsoft took nearly 44 years to reach the milestone and Bitcoin did so in only 12 years.
The market crash was largely blamed on billionaire Elon Musk’s electric vehicle company Tesla, which abruptly reversed its decision to accept payments in Bitcoin. And a widening crackdown by Chinese authorities on mining operations in the country. Cryptocurrency mining is an energy-intensive operation and a large number of miners operate from China, leading to fears that they may exhaust a big chunk of its power generation capacity. Also, China is wary of the disruption these virtual coins may cause to the existing financial structure.