At about 2:42 p.m. Singapore time, bitcoin was up 5 percent over the day before. Since the start of 2021, the cryptocurrency market is up 29 percent, and in the past 12 months, it is more than 380 percent higher.
â€œThis latest bull run in January is sure to attract the asset managersâ€™ attention to diversify even more of their assets to crypto as they are keen on finding alternative investments, such as cryptocurrency or gold, to hedge inflation and geopolitical risks,â€� Simons Chen, executive director of investment and trading at cryptocurrency financial services firm Babel Finance, told CNBC.
He added that a lot of new people jumped in to invest, worried they could be missing a good opportunity to â€œmake easy, quick gain from the latest bull run.â€�
Some bitcoin bulls have called bitcoin â€œdigital gold,â€� CNBC said, with J.P. Morgan forecasting that the currency could reach $146,000 in the long run.
Other economists are not as confident, with Rosenberg Research strategist David Rosenberg pointing to a bitcoin bubble.
â€œThe parabolic move in bitcoin in such a short time period, I would say for any security, is highly abnormal,â€� Rosenberg told CNBC.
Over the past dozen months, ethereum also saw record gains, up about 860 percent on Wednesday (Jan. 6) and trading above $1,200, CoinDesk reported.Â
â€œThe $1 trillion mark cements cryptocurrency as an investable asset class that no longer sits on the fringes of Traditional Finance as a toy for retail investors,â€� Jack Purdy, decentralized finance analyst at Messari, told CoinDesk. â€œIt demonstrates that this asset class is large enough to absorb large orders like weâ€™ve seen recently with the slew of institutions entering over the last few months.â€�
The cryptocurrency market includes bitcoin as well as numerous other digital money, such as tether, ripple, and Facebookâ€™s diem dollar, formerly called Libra. Facebookâ€™s Libra Association also renamed itself the Diem Association.Â