The total market value of all cryptocurrencies rose above $1 trillion for the first time on Thursday as Bitcoin surged to a record high.
Bitcoin has jumped more than 900 percent from a recent low of $3,850 in March, breaking $40,000 for the first time on Thursday as governments increase spending to blunt the economic impact of the pandemic.
The massive spending on stimulus has raised fears about rising inflation and U.S. dollar debasement, and investors are flocking to Bitcoin as a safe haven.
The cryptocurrency is also gaining traction with more mainstream investors who are increasingly convinced that Bitcoin will be a long-lasting asset, and not a speculative bubble as some analysts and investors fear.
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Bitcoin has jumped more than 900 percent from a recent low of $3,850 in March, breaking $40,000 for the first time on Thursday
Sergey Nazarov, co-founder of Chainlink, a decentralized network that provides data to smart contracts on the blockchain, said that there is a 'lack of faith in traditional institutions that is driving this large rally towards cryptoassets.'
'While outsiders may view the cryptocurrency industry being valued at over $1 trillion as an incredibly significant milestone, in actuality our space is still in one of its very early stages of development and growth,' Nazarov said.
'Bitcoin continues to defy all expectations, and doubters,' Antoni Trenchev, co-founder and managing partner of crypto lender Nexo, told Bloomberg.
'It's leaving all other assets trailing in its wake, like it's done year in, year out for the past decade.'
The market cap of all cryptocurrencies rose 10 percent to $1.042 trillion on Thursday, data from CoinMarketCap shows.