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Elon Musk’s support for Cryptocurrencies gives rise to record Market Value in a Volatile week

It seems that the cryptocurrency industry is not witnessing any dull moments. In the most recent period, Elon Musk’s proclamation as a supporter for Bitcoin and his tweet about Dogecoin, together with a record runup in Ether helped take the market value of digital tokens to an all-time high.

Tesla co-founder Musk posted light-hearted tweets about Dogecoin — a Shiba Inu meme-themed unit that was created as a joke but has now turned into something to keep a track of– stirring buying that drove its market capitalization past $6 billion. On Thursday, the value of more than 6,000 tokens tracked by CoinGecko, a cryptocurrency ranking and evaluation site, was an unprecedented $1.17 trillion.

These recent developments “provide more evidence of the way the casino-like gyrations of digital coins are seeping into the mainstream.” Prominent advocates of Bitcoin like Billionaire Musk say it’s winning broader acceptance in the finance community. Regulators, meanwhile, do not want people to get complacent and 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, according to Bloomberg.

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Bitcoin, Ether fuel rally in Bloomberg Galaxy Crypto Index
Bitcoin, Ether fuel rally in Bloomberg Galaxy Crypto Index. Image: Bloomberg

Even so, digital coins are still viewed by many investors as a treacherous sector. That was underlined in the U.S., where the 24-year-old founder of two New York-based cryptocurrency hedge funds (Virgil Sigma Fund and VQR Multistrategy Fund) with more than $100 million in investments, Stefan He Qin, pleaded guilty Thursday to securities fraud.

Bitcoin, the largest cryptocurrency, at about $37,400 as of 1:30 p.m. in Tokyo on Friday, is up 15% this week, while Ether has risen 26%.

Bitcoin may be strengthening before heading toward a record $50,000, which according to Mike McGlone, commodities strategist with Bloomberg Intelligence, would imply a market value for it of about $1 trillion.

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Ether’s eightfold rally over the past year faces possible turbulence as the impending launch of CME Group Inc. futures next week may open the door for bearish investors. The digital coin, on Thursday, was at $1,636, down from a peak of almost $1,700.

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