Bitcoin rally takes crypto market value to new record

Hong Kong

BITCOIN topped US$40,000 in a rally that helped the market value of digital tokens scale a new peak.

The largest cryptocurrency rose more than 7 per cent to $US40,658 at 12 pm in New York on Saturday, taking it closer to early January's all-time high of almost US$42,000. The value of more than 6,000 tokens tracked by CoinGecko hit about US$1.23 trillion.

The jump comes after another volatile week in cryptocurrencies marked by Elon Musk's support for Bitcoin and a record runup in Ether, the second-largest token. Billionaire Musk also posted tongue-in-cheek tweets about Dogecoin - a Shiba Inu-themed unit that began as a joke - stirring buying that drove its market capitaliation past US$6 billion.

The developments provide more evidence of the way the casino-like gyrations of digital coins are seeping into the mainstream. High-profile proponents of Bitcoin such as Mr Musk say it's winning broader acceptance in the finance community. Regulators, meanwhile, are stepping up warnings of volatility that could wipe investors out.

"Investor perception is at an all-time high at both the retail and hedge fund levels," said Jehan Chu, managing partner with blockchain advisory firm Kenetic Capital in Hong Kong. Even so, many investors still view digital coins as a treacherous sector. That was underlined in the US, where the 24-year-old founder of two New York-based cryptocurrency hedge funds with more than US$100 million in investments pleaded guilty last Thursday to securities fraud.

Bitcoin, the largest cryptocurrency, was up about 24 per cent last week. The token may be consolidating before heading towards US$50,000, which would imply a market value of about US$1 trillion, said Mike McGlone, commodities strategist with Bloomberg Intelligence.

Meanwhile, Ether's eight-fold rally over the past year faces possible turbulence from the impending launch of CME Group Inc futures this week. The contracts may open the door for bearish investors. The digital coin was at US$1,693 as at 12pm in London on Saturday. BLOOMBERG