The market value of all Bitcoin (BTC-USD) in circulation hit $1trn (£710bn) for the first time ever on Friday night after the price of each individual coin surpassed $56,000, data website CoinMarketCap revealed.
The cryptocurrency extended its stellar two-month rally, rising to a record $56,620, meaning it has surged more than 92% this year alone. It has gained almost 20% this week.
In December it soared past Visa (V) to make it the world’s largest financial service.
Earlier this month, Tesla invested $1.5bn in the cryptocurrency, and said it may even start accepting it as payment for its products.
In a filing with the SEC, Tesla said it has “invested an aggregate $1.5bn in bitcoin,” and “may acquire and hold digital assets from time to time or long-term.”
It added that it expects to “begin accepting bitcoin as a form of payment for [its] products in the near future, subject to applicable laws and initially on a limited basis, which [it] may or may not liquidate upon receipt.”
Its popularity has also been boosted by Tesla’s founder Elon Musk, who has often been seen tweeting about Bitcoin and cryptocurrencies.
He publicly declared on Thursday that he favours it to fiat currency as global interest rates are currently at record lows, saying Bitcoin is a “less dumb form of liquidity than cash.”
“To be clear, I am not an investor, I am an engineer,” he said on Twitter. "I don’t even own any publicly traded stock besides Tesla.”
He added: “However, when fiat currency has negative real interest, only a fool wouldn’t look elsewhere. Bitcoin is almost as bs as fiat money. The key word is 'almost'.
Musk also defended Tesla’s move to invest by saying Bitcoin is “adventurous enough for an S&P 500 company.”
Watch: What is Bitcoin?
Last night he changed his Twitter profile picture to Bitcoin “just for the day,” tweeting “I just want to start a flame in your heart.”
Bitcoin started 2020 at around $7,000 per coin. Despite its rise in the last year, the cryptocurrency remains extremely volatile and experts continue to remain sceptical about using it as an investment.
However, a survey published last week showed almost two-thirds of UK investors intend to buy bitcoin in 2021 and well over half expect its value to increase to $60,000.
Ethereum (ETH-USD), the second-largest cryptocurrency in the world by market cap, also hit a record overnight, touching over $2,000 for the first time in its history.
Dogecoin hit a new all-time high this month, as celebrity attention including rapper Snoop Dogg continued to buoy up the price of the joke token.
The digital currency, which uses a Shiba Inu dog as its mascot, first started up as a joke in 2013 but has seen its market capitalisation pass $6bn.
Musk first tweeted just the word “Doge,” followed by “Dogecoin is the people’s crypto,” and “No highs, no lows, only Doge.” He also posted a Lion King meme of him holding up the dogecoin dog as if it were Simba.
He said at the time: "They are really just meant to be jokes, but you know Dogecoin was made as a joke to make fun of cryptocurrencies obviously, but fate loves irony and often as a friend of mine says that the most ironic outcome or I'd say the most entertaining outcome and the most ironic outcome would be that Dogecoin becomes the currency of earth in the future.”
Watch: What are the risks of investing in cryptocurrency?