2020-12-27 08:00:00

Bitcoin hits $500bn market cap for the first time in history

According to Asset Dash, the digital currency now it takes 11th place among the biggest global assets, behind such giants as Facebook, Apple and Tesla. Photo: Nik Oiko/SOPA Images/LightRocket via Getty Images

The combined value of all Bitcoin (BTC-USD) tokens in circulation has reached half a trillion dollars for the first time ever as the cryptocurrency continues its stellar rally.

According to Asset Dash, the digital currency now it takes 11th place among the biggest global assets, behind such giants as Facebook (FB), Apple (AAPL), and Tesla (TSLA) and ahead of Samsung (005930.KS), Walmart (WMT) and Coca Cola (KO).

It also pushed ahead of Visa on Sunday, before pulling back slightly, making it the world’s largest financial service.

In just the last day alone, Bitcoin climbed around 15% to $28,000 (£20,925), passing the psychological $25,000 benchmark. By 5pm on Sunday it was up just 1.4% to $26,800.

Bitcoin has risen around 50% since the week before Christmas.

The rise last week was accelerated by British fund manager Ruffer Investment Management (RICA.L), which revealed it had bought $745m worth of Bitcoin, pushing the digital currency above the $20,000 price level for the first time.

Ruffer has allocated 2.7% of the fund to the digital currency, using its profits from gold to buy Bitcoin.

It comes as high-profile Bitcoin investor Nigel Green, chief executive of financial advisory group deVere, sold half of his holdings this week.

“I have sold half my holdings of Bitcoin as it hit an all-time high,” he said in an emailed statement. “Why? Because it should now be treated as any other investment—that’s to say, where possible, it’s better to sell high and re-buy in the dips.”

He added: “The steady gains in the price of Bitcoin has made the digital currency the top performing asset of 2020, up over 200%. As such, I felt the time was right for profit-taking.

“There should be no misunderstanding about my decision to sell. It is not due to a lack of belief in bitcoin, or the concept of digital currencies—it’s profit-taking now to buy more later.”

The price of Bitcoin has soared this month. Chart: Yahoo Finance

The price of Bitcoin has soared this month. Chart: Yahoo Finance

Bitcoin started 2020 at around $7,000 per coin. Despite its rise this year, the cryptocurrency remains extremely volatile and experts often remain sceptical about using it as an investment.

However, Matt Hougan, chief investment officer of Bitwise Asset Management told Bloomberg: “What’s happening now – and it’s happening faster than anyone could ever imagine – is that Bitcoin is moving from a fringe esoteric asset to the mainstream.”

“If it’s going mainstream, there is just so much money on the sidelines that is going to have to come in and establish a position that it leaves me very bullish for 2021.”

In October, PayPal (PYPL) announced that it would allow the cryptocurrencies on its platform in what was a major move toward the mass adoption of digital currencies.

The California-based payments platform said the launch of its new service would allow customers to buy, hold and sell cryptocurrency directly from their PayPal account.

US account holders will be able to deal in digital coins, including Bitcoin, Ethereum, Bitcoin Cash and Litcoin in the coming weeks and plans to expand to Venmo and some countries in the first half of 2021.

Customers will be able to use their cryptocurrency holdings to pay for goods and services at PayPal’s 26 million merchants worldwide from early next year. However, merchants will not receive virtual coin payments, with cryptocurrency payments being settled using fiat currencies, such as the US dollar, the company said.

PayPal has partnered with Paxos, a New York chartered trust company, to provide cryptocurrency trading and custodial services.

Watch: Why investors are piling into Bitcoin despite the risks

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