Is it smart for companies to pour money into bitcoin?

Anthony Pompliano, investor and bitcoin enthusiast, and Jason Calacanis, Uber investor and Inside.com founder and CEO, join 'On the Edge' to discuss the increasing number of companies investing their cash in bitcoin and whether it's a good idea to do so. Subscribe to CNBC PRO for access to investor and analyst insights on tech and more: 3dIH56N

Bitcoin’s value surpassed $1 trillion on Tuesday as the price of the cryptocurrency jumped.

The digital coin’s price rose on Tuesday and its market capitalization went above $1 trillion in mid-morning trade Singapore time, according to CoinDesk.

Bitcoin extended those gains hitting a 24-hour high of $54,348.57 in early afternoon Singapore time, around 7% higher than the same time a day before. Bitcoin has since pared some of those gains.

It is only the second time that bitcoin’s value has surpassed a $1 trillion after hitting that milestone for the first time on Feb. 19. Bitcoin’s market capitalization held above $1 trillion for a few days, before falling below that mark.

Even though bitcoin is sitting off of its all-time-high of $58,332.36, it has seen a huge rally. The digital currency is up over 80% this year and 570% higher over the last 12 months.

Bitcoin’s rally has been attributed to several factors including participation from larger institutional investors and some notable purchases from corporations. Tesla, Square and Microstrategy are among the companies that have purchased bitcoin.

On Sunday, a Chinese appmaker called Meitu said that it had purchased not only bitcoin, but another cryptocurrency called ether too. Ether, a cryptocurrency which runs on the Ethereum network, was trading at $1,836.73 at around 10:41 a.m. Singapore time, up nearly 7% from a day before, according to CoinDesk.

Companies are also making acquisitions in the cryptocurrency space. PayPal on Monday said it will buy cryptocurrency security firm Curv.

Proponents of bitcoin often liken it to “digital gold,” a hedge against inflation and potential “safe-haven” asset where investors can park their money in times of political or economic turmoil.

Some argue that loose monetary policy such as low interest rates and asset purchases by central banks around the world erodes the value of fiat currencies like the U.S. dollar and bitcoin provides a better alternative to invest in.

» Subscribe to CNBC TV: SubscribeCNBCtelevision
» Subscribe to CNBC: SubscribeCNBC
» Subscribe to CNBC Classic: SubscribeCNBCclassic

Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.

The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: 2020/09/29/the-news-with-shepard-smith-podcast.html?__source=youtube%7Cshepsmith%7Cpodcast

Connect with CNBC News Online
Get the latest news:
Follow CNBC on LinkedIn: LinkedInCNBC
Follow CNBC News on Facebook: LikeCNBC
Follow CNBC News on Twitter: FollowCNBC
Follow CNBC News on Instagram: InstagramCNBC

select/best-credit-cards/

#CNBC
#CNBCTV