Cryptocurrency Market Cap Hits $2 Trillion, Surge Led by Bitcoin and Ethereum
According to available data from market tracker, Blockfolio, the market cap for cryptocurrency hit an all-time high of $2 trillion earlier this week. Bitcoin, by far the biggest of all the available digital currencies led the surge, accounting for over half the total market cap of all cryptocurrencies. Bitcoin has been attracting a great deal of attention from institutional, as well as retail investors.
Since peaking in mid-March, Bitcoin has traded in a relatively narrow band. The crypto closed today (April 7) at over $56,000. Analysts are suggesting that as long as Bitcoin does stay above the $53,000 mark, it will be in a position to maintain its current market cap of $1 trillion-plus. Bitcoin, which accounts for at least half the total crypto market cap, has rallied over 100 percent in the last three months. This alone has helped drive the cryptocurrency market higher.
Ethereum up as Well
The crypto market appears to have been boosted by an Ethereum rally. Ethereum rose by 1.3 percent on the day, hitting $2,103. At the start of this week, Ethereum’s market cap was $244 billion.
Paolo Ardolino, chief tech officers at Bitfinex suggests that market interest and momentum appear to be expanding beyond just Bitcoin and Ethereum. Mr. Ardolino went on to say, “As the industry becomes more mature, look for more blockchain-based applications.” Coinciding with this, he suggests there will be a surge in interest in other alternate assets, as they too become market-ready.
Although both Bitcoin and Ethereum run on blockchain technology, Ethereum has similarities to a software platform, allowing for the development of apps on it.
There is considerable excitement regarding the use of Ethereum in DeFi (decentralized finance) applications. These applications are financial services, such as lending, that are blockchain-based. In theory, at least, these applications could bypass banks and brokerage services.
Ethereum has the technology that is behind the recent excitement in NFTs which are a new type of digital asset.
American billionaire investor Mark Cuban, whose current net worth is estimated to be well over $4 billion, says Ether is the closest thing there is to a true currency. Ether is up well over 180 percent this year alone, hitting a high of $2,151 Tuesday morning in Singapore.
The asset is also sparking considerable interest amongst companies. In March, Chinese company Meitu purchased over $22 million of Ethereum. This purchase makes Meitu one of the first major companies to make a purchase of this magnitude.
Interest in Bitcoin Remains High
The powerhouse of the cryptocurrency market is still Bitcoin. The last few months have seen a huge increase in interest with large institutional investors and companies alike. Amongst the companies that have become involved with Bitcoin are Tesla and Square.
Major investment banks are looking at a host of different ways that would allow clients to become involved with investments in digital assets. Morgan Stanley is leading the way. In March, it became the first major bank in the U.S. to provide its wealth management clients with an entree to Bitcoin funds. Goldman Sachs is not far behind. It has been reported that they are preparing the launch of a Bitcoin investment vehicle to private wealth management clients.
Many investors are keeping a sharp eye on Grayscale Investments, the company behind one of the largest publically traded funds dedicated to Bitcoin. The company said it is “100 percent” committed to converting the public’s trust in them into an ETF (exchange-traded fund). The fund would track the ever-changing price on Bitcoin, providing traders with the opportunity to take advantage of the movement in prices without actually owning Bitcoin itself.