Bitcoin surpasses $38,000 for first time, lifts cryptocurrency market value above $1 trillion

Digital currency Bitcoin hit an all time high of $38,000 per unit after a frenzied rally on Thursday, taking the cryptocurrency market above the $1 trillion mark for the first time ever.

In the early hours of Thursday, the digital coin hit an all time high of $38,169 by rising 6 percent and having more than quadrupled in the past year, reported Bloomberg. The digital currency was trading above $35,000 for the first time in Asia on Wednesday, rising to a high of $35,879. It was up by 1 percent on Tuesday and was trading at around $31,720, according to crypto market data provider Coin Metrics.

Bitcoin emergence as 'digital gold' could lift price to $146,000, says JP Morgan

Based on its data, the digital coin scaled up about 30 percent since the start of 2021 and in the past 12 months has surged nearly 370 percent. Currently, bitcoin is the most dominant cryptocurrency, having a market value of over $700 billion, reports CNBC.

While bitcoin bulls compare the cryptocurrency to 'digital gold', critics decry the intellectual soundness of comparing the two assets. Economist and strategist at Rosenberg Research David Rosenberg had called bitcoins as massive 'bubbles'.

"What’s holding the boot together is basically zero interest rates. As long as rates remain where they are, unless we have a real dramatic pullback in economic activity, this bubble that we’re in is probably not going to burst any time soon. We have to understand though we are investing in a bubble,” CNBC quoted Rosenberg as saying.

Meanwhile, bitcoin's proponents argue it offers a hedge against dollar weakness and the risk of faster inflation. Crypto hedge fund Morgan Creek Digital's co-founder Anthony Pompliano claimed that the total transaction volume of bitcoin in 2020 was greater than that of Venmo, PayPal or Apple Pay.

Earlier on Tuesday, JP Morgan CEO Jamie Dimon had stated that bitcoin could rally as high as $146,000 in the long term as it competes with gold as an "alternative" currency. According to JP Morgan, it would have to climb by 4.6 times to match the $2.7 trillion of private sector gold investment.

The world's most popular cryptocurrency crossed $20,000 for the first time ever on December 16, 2020.  Data says less than 2 percent of accounts hold 95 percent of bitcoin supply. The last bitcoin boom began imploding in late 2017.