Stocks are at record highs.
After rising yet again on Thursday, both the S&P 500 and the Nasdaq closed at record highs with most of the market’s focus zeroing in on Amazon (AMZN), which came within a few bucks of hitting $1,000 a share for the first time.
On Friday, markets will get a few key pieces of economic data to focus on, with the second estimate of first quarter GDP due for release as well as the final reading on consumer sentiment in May from the University of Michigan.
The earnings calendar will be quiet with no S&P 500 company due to report results ahead of the three-day Memorial Day holiday weekend.
On Thursday morning, Bitcoin traded above $2,700 for the first time.
By the afternoon, Bitcoin prices were back near $2,400.
“This is the perfect asset for a speculative bubble,” said Henry Blodget, CEO of Business Insider on Thursday.
“There is a finite supply and no intrinsic value… If anyone is persuading you it should be related to GDP or gold, put down the Kool-Aid… The logic of folks who are buying [Bitcoin] is, ‘All I can lose is 100%. I could make 10x, 100x, 1000x, it’s all possible.’ … [Bitcoin] could literally go to $1,000,000.”
Blodget added that if you want to look at some way to find the “intrinsic” value of the currency, look at transactions per day, which have been on the rise over the last several years.
Ultimately, however, Bitcoin right now is seeing the second wave of a mania that took hold back in 2013 when the price of the cryptocurrency rose from around $80 to $1,100.
Last week, Yahoo Finance’s Dan Roberts outlined why Bitcoin prices keep going bonkers.
And while a number of factors including digital currency getting recognition as legal tender from governments, including Japan, aid the positive sentiment towards bitcoin prices, the latest spike is ultimately backed by a simple economic principle: scarcity.
There are a limited numbers of Bitcoins. And while the current owner of Bitcoin or the speculator wondering whether now is the right or wrong time to take a nibble at owning some, each person who hears about the latest spike becomes a potential marginal buyer.
Even at these prices.
Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland
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