Bitcoin has been barreling through records, scaling another peak above $51,000 on Wednesday. Tesla Inc.’s recent $1.5 billion purchase and MicroStrategy Inc.’s plan to expand its holdings of the token by selling $600 million in convertible bonds added to the buzz around cryptocurrencies. On the flip side, some see a mania likely to end in a bust akin to the implosion in 2017.
JPMorgan said Bitcoin’s market value has risen by about $700 billion in the past five months despite an aggregate institutional inflow of only around $11 billion. Limited supply of the token and retail demand may be pushing up prices, Panigirtzoglou wrote.
“Movements since January this year appear to have been more influenced by speculative flows," the team said.
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