Cryptocurrencies are surging, but so is the risk of an asset bubble

Investing.com — The total market cap of the crypto asset class rose to a record $154B this week.

But is a crash coming or have cryptocurrencies hit their stride?

Last week Bitcoin peaked at nearly $4900 before pulling back.

Bitcoin has a market cap of around $69B, making it the most valuable cryptocurrency.

Bitcoin prices largely depend on holders having faith they will continue to rise.

But assets held as stored value can crash.

This happened in the dot.com boom and the Dutch Tulip Mania of 1637.

And extreme price volatility is a sign that digital currencies are speculative assets.

Analysts are divided on what could happen to the price of bitcoin in the short term.

Goldman Sachs has said there could be a short-term rise ahead before a large correction.

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