Bitcoin and Ethereum hit new all-time highs

Amid the overall rally in cryptocurrencies, both bitcoin and ether hit record highs on Tuesday, with bitcoin rising as much as 3.6% to $68,513, while ether edged up to $4,840. The total value of digital tokens tracked by CoinGecko reaches about $3.1 trillion. It's not easy to understand why virtual currencies are rising. Some theories point to investors' interest in assets that can generate returns, and some analysts have linked this round to investment needs to hedge against inflation risk.

The launch of the first bitcoin-related exchange-traded fund (ETF) to U.S. investors also helped fuel the market, with bitcoin hitting a historic $66,000 in October. This landmark move is proof that virtual currencies are gaining acceptance from more mainstream investors, including institutional investors.

The journey has not been smooth, though: Bitcoin fell below $30,000 in June due to energy concerns and China’s crackdown on cryptocurrencies, before gradually recovering as the cryptocurrency industry adjusts to China’s regulation.

Another theory for Bitcoin’s rise is the seemingly ubiquitous Elon Musk, the world’s richest man who launched a Twitter poll asking netizens if it was time to sell 10% of Tesla’s stock, which was supported by more than half of netizens.

If sold, what will Musk do with the money? He previously said he wanted Bitcoin to succeed, and he bought Bitcoin, Ethereum and Dogecoin himself.