Total Cryptocurrency Market Value Hits $1 Trillion
The start of the new year has become very exciting for all crypto investors. On Thursday we witnessed some incredible news. Bitcoin rose as much as 4% to reach $37,000. Consequently, the entire crypto sector’s market cap has surpassed $1 trillion. This is a milestone like we haven’t seen before, and despite warnings, the optimistic perspective seems to remain prevalent.
This achievement comes in a time when cryptocurrencies continue to climb the market for more than a year. Analysts are pointing towards speculative retail traders, institutional investors and even trend-following quant funds as the main reason for such high demand. U.S. dollar debasement and massive spending on stimulus, and fears about rising inflation have pushed investors towards the Bitcoin as a safe heaven.
Rise of Bitcoin
On Friday, Bitcoin has soared past $40,000 as it still continues to push the total market value. All the commotion in 2020 was the perfect storm to push Bitcoin to new levels. Even the biggest of optimists could hardly expect such results. There was a jump of more than 1,000% since March. Price rose from $3,850 all the way to $40,000.
There were several factors that contributed to this climb. Fist of all, there were fears of rising inflation across the world as a consequence increased government spending. In the midst of containing the coronavirus news on U.S. dollar debasement had a big impact on all investors. Additionally, mainstream investors have become more comfortable with the idea of Cryptocurrency. The lack of faith in the traditional institutions was getting more apparent as the months went on.
The value of digital coins will likely continue to rise in a pandemic-hit world. This sentiment was expressed by Geoffrey Morphy, president of Canadian crypto mining company Bitfarms Ltd. In a recent interview, he stated: “The more that people perceive that their assets, particularly their liquid assets such as fiat currencies are eroding in value, the more they will look for alternatives”.
Is it too late to invest?
There is still a lot of hype surrounding cryptocurrencies in 2021. Bitcoin is slowly but surely transitioning from an abstract idea to a mainstream means of payment across the world. Whit is more, it is probably unwillingly pushing many altcoins as well. All digital coins have come a long way in the past 10 years and most likely they will remain in the public consciousness for a long time. Still, some Wall Street analysts are advising caution. There are those who believe Bitcoin is a bubble, as its massive gains in such short time periods are not common in this industry.
On the other hand, many people, such as Bloomberg Intelligence’s Mike McGlone believe this is just the beginning. According to Mr McGlone, Bitcoin could soon achieve a total worth of $1 trillion by itself. This would translate to a price of $54,000 a coin. Let us not forget about the other crypto coins. Despite being responsible for nearly 69% of the market cap, Bitcoin is always closely followed by Ethereum with a 13% share. These two always seem to be traded in tandem. For Ethereum, this translated into its highest levels since 2018. On Thursday, it was valued at $1,287.
The higher adoption rate of Cryptocurrencies by the general public seems inevitable at this point. Financial institutions are being directed to blockchain technologies which will only drive the market in the coming years. The upcoming restructuring of the financial ecosystem will bring a lot of volatility, which seems to be beneficial for most crypto investors. If you feel this suits you, do not forget you can start trading today simply by clicking here and logging into your account. FXVC offers you a wide range of crypto assets that you can trade on.
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