By Yasin Ebrahim
Investing.com - Bitcoin surged to remain close to record highs Tuesday as investors continued to 'buy the dip' following early-day weakness, suggesting the popular crypto has more room to grow.
Bitcoin rose 6% to $33,545, just below its all-time high of $34,253 as investors bought the weakness seen earlier in the day and on Monday when the popular crypto fell below $30,000.
JPMorgan (NYSE:JPM) made a bold bitcoin call on Tuesday, claiming the cryptocurrency can mount a rally to $146,000 on its potential to rival gold as an "alternative" currency. Bitcoin has its work cut out if it is to challenge gold in the private sector as its market cap would have to climb by 4.5 times to $2.7 trillion.
The wild swings in the price of bitcoin prices, meanwhile, would likely have to steady for cryptocurrency to attract the institutional investment dollars that will support a sustained surge in market cap, and with it a rise above $100,000, JPMorgan added.
“This long term upside based on an equalization of the market cap of bitcoin to that of gold for investment purposes is conditional on the volatility of bitcoin converging to that of gold over the long term."
Bitcoin is up 16% for the year after rallying more than 300% last year, driven largely by demand from institutional investors faced with a need to hedge the ongoing currency debasement as central banks persist with monetary policy easing to boost their respective economies.
The meteoritic rise in bitcoin demand, however, has not filtered through into altcoins - those with far lesser market caps and likely to be viewed as illiquid by institutional investors - in a meaningful way as bitcoin makes up nearly 70% of the entire crypto market.
Ethereum, the second largest crypto by market valuation, is about 30% below its all-time high market cap seen in the previous rally in 2018.
But some point to signs that the demand is starting to trickle through to other areas of markets.
"What we’re seeing is the standard moving of the crypto markets from bitcoin to the altcoin market led by Ether," said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore, according to Bloomberg. "This rotation happens usually when bitcoin has a large rally and investors rotate profits” into other digital coins.
Ethereum, rose 4.59% to $1,088.90, LTC/USD climbed 3.6% to $156.05 and ADA/USD was up 16% to $0.251179.