Bitcoin surge helps investors recover losses

The price of bitcoin rose above the US$40,000 mark over the weekend, after plunging nearly a third in the past month, as institutional investors bet on the cryptocurrency and Elon Musk offered his endorsement.

The price of bitcoin (BTC) rose above US$40,000 during the weekend and stood at US$38,802 around 4 pm on Sunday. It helps investors regain losses in the past month since the price was about to dip below US$30,000 from a record high in January at US$41,962. 

Bitcoin now ranks No.9 in value, behind Tesla and Facebook and ahead of Alibaba, according to AssetDash data. 

“The scarcity of Bitcoin appears to be particularly certain in the environment with the epidemic, water (capital) release and zero or even negative interest rates,” said Xu Tong, a senior analyst of Huobi, a major cryptocurrency trading platform in China.

Its anti-inflation value and functions have been further affirmed by the market, attracting more institutional investors instead of personal investors, Xu added.

The jump has also been boosted by billionaire and Tesla’s boss Elon Musk. Musk declared his support for Bitcoin in the week in his latest tweets.

Bitcoin, the largest cryptocurrency, is up about 24 percent this week. It may be consolidating before heading toward $50,000, which would imply a market value of about US$1 trillion, according to Bloomberg Intelligence.

Market fluctuations caused by short-term profit settlement are also normal. Investors should pay attention to risk control, according to Xu.