The world’s leading cryptocurrency bitcoin was up 1.1% to $39,496 at the time of writing after briefly surpassing $40,000 last weekend. The price is now about 7% below an all-time high, which was set in early January. After a brief low this month, Bitcoin is rejuvenating once again as crypto enthusiasts tout the cryptocurrency as a hedge against inflation and store of value in a world awash with the stimulus in the U.S. and rampant central-bank money printing.
Economists believe that relief package may risk overheating the economy.
Prominent economists like Lawrence Summers have recently raised concerns that U.S. President Joe Biden’s $1.9 trillion virus relief package may risk damaging the economy. Bitcoin’s free float, a measure of how many coins are available to trade, has fallen to 13% of supply, which is the lowest since 2014, according to Chainanalysis. “This suggests that Bitcoin available to buy remains scarce despite record prices,” wrote Philip Gradwell, chief economist at the Chainalysis. The leading cryptocurrency has witnessed massive rallies this year as the price crossed above the $40,000 mark for the first time.
Dogecoin also surged after Elon Musk’s tweets.
Dogecoin, the meme-based cryptocurrency featuring a Shiba Inu dog as a mascot, briefly touched a record Monday after billionaire Elon Musk, rapper Snoop Dogg and Kiss bassist Gene Simmons tweeted about it. The cryptocurrency climbed to a peak of about 8.2 U.S. cents and a market capitalization of $10.5 billion during Asian trading hours Monday before pulling back, according to pricing data from CoinGecko. Dogecoin’s surprising social media-fueled rally is just one instance of the revival in cryptocurrencies over the past year. The two leading cryptocurrencies, Bitcoin and Ether, both scaled fresh peaks in recent weeks amid a debate about whether they’re blipping onto the radar of long-term investors or being lifted by waves of speculative buying in a world awash with stimulus.