After the surge on Monday, Bitcoin's market value surpassed Bank of America's total network computing power and reached a new high of 130EH

As Bitcoin gains more support from investors, its market value has surpassed that of Bank of America and ranked second only to PayPal after rising 4% to above $12,000 on Monday.

According to AssetDash, Bitcoin’s current market capitalization is just over $226 billion, up 4% in the past 24 hours. However, Bank of America’s market capitalization has fallen by more than 2% today to $224.4 billion. This bullish behavior of Bitcoin (BTC) and Bank of America’s small drop means that the analysis site ranks Bitcoin as the 25th most valuable asset by market capitalization, second only to international payment giant PayPal ($230 billion).

However, Bank of America is not the only institution or large asset lagging behind Bitcoin today as the cryptocurrency hits its yearly high of $12,470. FiatMarketCap, a website that tracks gains against major fiat currencies, noted that Bitcoin’s market capitalization has now surpassed that of the New Zealand dollar (NZD).

Bitcoin now exceeds the site's estimated total circulation of 346.4 billion New Zealand dollars, or about $227 billion. This would rank Bitcoin 34th among all fiat currencies.

Traditional investors start choosing Bitcoin

Bitcoin's price has surged in 2020 as the Federal Reserve has taken a number of controversial steps to mitigate the economic impact of the coronavirus pandemic, prompting many of the biggest names in finance to consider cryptocurrencies for the first time.

Billionaire Warren Buffett’s feelings on cryptocurrencies are well known – saying they are “essentially worthless”, but Jason Williams of Morgan Creek Digital and others are predicting that Berkshire Hathaway, Buffett’s multinational conglomerate holding company, could soon invest in Bitcoin. Williams said that even if Buffett pretends not to know about Bitcoin, the company’s “young managers and analysts” will make the decision to buy Bitcoin. There have also been recent rumors that Buffett is about to get involved in Bitcoin mining.

Buffett is not the only billionaire who may be looking at Bitcoin as a hedge against his bets. Paul Tudor Jones, founder of the hedge fund Tudor Investment Corporation, also remains bullish on Bitcoin as he revealed in May that Bitcoin was part of his portfolio.

Another possible new face of the cryptocurrency world is Barstool Sports founder Dave Portnoy, who recently spoke with Gemini exchange founders Tyler and Cameron Winklevoss. With the help of his twin brothers, Portnoy bought $200,000 in Bitcoin and $50,000 in Chainlink (LINK), his first cryptocurrency purchase.

Bitcoin’s seven-day average network computing power (hash rate) hit an all-time high of 130 (EH/s), an event that could have a positive impact on the asset’s price while strengthening the fundamentals of the Bitcoin network.

According to the latest data from charts.Bitcoin.com , the previous peak of about 127 EH/s was recorded on July 28. Bitcoin’s ( BTC ) hash rate fell sharply to about 90 EH/s after the last halving on May 11 , as miners with old, inefficient Bitcoin mining equipment shut down operations.

However, this decline was quickly reversed as miners re-entered the network. Bitcoin’s scheduled supply reduction reduced miner block rewards by 50% to 6.25 BTC per block. Overall, Bitcoin’s processing power has increased by more than 77% since August 10, 2019. Miners have also begun to rely more on transaction fee rewards.

The hash rate is a measure of the computing power linked to the Bitcoin blockchain, which determines the server's ability to generate Bitcoin. An increase in hash power indicates that miners are optimistic about future profits.

Given the strong correlation between the two, this could also have an impact on higher Bitcoin prices. However, the relationship is not completely linear, and it is difficult to estimate future price changes based on changes in hashrate alone, so the situation may be different.

The benefit is that when miners devote more computing power to processing Bitcoin transactions, this helps protect the network from 51% attacks, making the network stronger.