Bitcoin falls six per cent after weekend highs

Bitcoin rose to a record $58,354, taking its weekly gain to around 20 per cent

Bitcoin continued rising on Sunday, reaching a new high and extending a two-month rally, taking its market capitalisation above $1tr (£712bn, €823bn) on Friday. The cryptocurrency rose to a record $58,354, taking its weekly gain to around 20 per cent. 

However, the volatile crypto fell as much as six per cent on Monday as a selloff in global equities curbed risk appetite. It was last trading down 4.4 per cent at $54,941.

Rival cryptocurrency Ethereum fell seven per cent to $1,798 after also hitting a record high on Saturday.

Bitcoin’s gains have recently been boosted by it gaining acceptance among mainstream investors and companies such as Tesla, Mastercard and BNY Mellon.

According to analysts Tesla has made roughly $1bn in paper profits from its investment into Bitcoin.

Tesla boss Elon Musk, whose tweets on Bitcoin have added more value to the cryptocurrency’s rally, said on Saturday the price of Bitcoin and Ethereum do “seem high”.

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Meanwhile, analysts at JP Morgan say Bitcoin is an “economic side show” and fintech innovation is what will dominate financial services.

Analysts at the bank said that despite Bitcoin’s rising rally, the cryptocurrency is still held back by a number of issues that may prevent it from becoming a mainstream asset.

“But fintech innovation and increased demand for digital services are the real Covid-19 story with the rise of online start-ups and expansion of digital platforms into credit and payments,” the bank said.

FURTHER READING: Dogecoin rises almost 50 per cent in a day after Elon Musk's tweets

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