- Bulls continue to edge forward as the crypto market cap soars above $2.6 trillion, with Bitcoin and Ethereum making record huge gains.
- With the market hitting a new all-time high this year, crypto enthusiasts are delighted that the market has fully recovered from the downturn induced in June.
- In other developments, Bitcoin is rapidly recovering from the drop that sent it below the $60,000 mark.
- Experts believe that the only way is up from here, but they could be wrong as no one effectively predicted the June downturn at the start of the year.
The crypto market is known for its volatility and huge market capitalization. Bitcoin, which launched in 2009, was the fastest asset to reach a trillion dollars by market capitalization. That very feat has been a major point for crypto enthusiasts going head to head in debate with other forms of traditional investment. As the rate of adoption increases due to users in the cryptoverse, crypto’s market cap also continues to rise, reaching new heights.
Despite the fact that it is a highly volatile market, users can always predict a steady rise in the long run based on an asset’s utility in finance. The market cap of a coin is the total value of all of its circulating tokens, and represents the value in the market held by given cryptos, stablecoins, DeFi tokens, etc. The market cap for cryptocurrencies has risen to a new high, but what are the reasons for the rise, and what does the future hold?
The Market Cap is Through The Roof
Following the resumption of miners’ operations in other parts of the world, the market has seen an upturn, and consistently been on the rise. On Wednesday, the market capitalization soared above $2.6 trillion, marking a new all time high. The increase in market capitalization has been linked to surges in both the two major cryptos in Bitcoin and Ethereum, as well as those of other Altcoins.
BTC made it up above $67,000, reaching a personal all-time high, while ETH also rose to above $4,000 once more. As is time honored tradition at this point, the crypto market cap’s surge is linked to the rise of BTC itself, as the leading coin.
BTC holds over 46% of the total market cap, although for a long time it was over 50%. This is a repetition of the pattern last seen in April, when BTC hit an all-time high of $64,800, and the total market cap hit $2 trillion, even rising as high as $2.2 trillion.
Last week, the U.S. launch of the first Bitcoin ETF, quickly followed by a second, was a major factor leading to the surge for the top coin. The ProShares Bitcoin ETF recorded trading volumes of over $1 billion in its first day, leading to a new ATH.
Volatility Is Always Constant
If one thing is certain in the price of crypto, it’s the volatility. The market cap, which hit a record high last week, briefly lost billions of dollars, currently standing at over $2.55 trillion as of this writing.
The 3 month chart for the crypto industry. Source: Tradingview
The slight dip has been linked to traders making quick profits from their holdings as Bitcoin realised its record high. In April this year, crypto’s market cap went up to $2.2 trillion as Bitcoin and other coins soared.
By April 2021, the market had grown by more than 100% from the $936 billion cap recorded in January. Following the trend, the market then dropped to as low as $1.3 trillion, losing hundreds of billions. These losses are, however, a yearly occurrence, as demonstrated by the market fluctuations from between $100 to $300 billion in 2019.
Likewise, In January 2018, the industry’s market cap was over $700 billion, but sharply fell to $120 billion by December that year.
On The Flipside
- The market, which was at an all-time high last week, has already shed billions, continuing the trend of volatility.
- Regardless of the volatility, the data shows that the crypto market cap is steadily on the rise.
What’s Next for the Market Cap?
The industry’s market cap, which stands at $2.59 trillion, has dropped a little from the recorded ATH. From here, the market cap is expected to maintain its value with few corrections, but in the long run, it is expected to rise much further as adoption continues.
The Chinese clampdown, which initially heralded the downturn, has led to mining migration, increasing Bitcoin’s hashrate. With increased adoption of DeFi, 2022 will see even new highs for the market.
Why You Should Care?
Market cap is used to measure how well the market is performing at a given point. As a trillion-dollar market, the cryptoverse has drawn the attention and adoption of unlikely investors from traditional finance. There is always room for more investment in the market, and, by all accounts, it is expected to grow exponentially.