- A record $340 billion was traded in the crypto market on Monday, January 6, 2021
- Tether (USDT) makes the most contribution to the record trading volumes
- Trading is known to increase during price rallies, hence the record
- Bitcoin is now being used as a hedge against inflation
According to data from CoinMarketCap, trading volumes on major cryptocurrency exchanges hit a daily record on Monday, January 4, 2021.
Research data showed that over $340 billion was traded in 24 hours on Monday. This trading frenzy was the highlight that accompanied Bitcoin’s charge to an all-time high.
The rally which has been building up for weeks entering into the new year finally saw Bitcoin hit a record high US$34,800 on Sunday, January 3, 2021. Bitcoin’s record high came less than three weeks after it crossed US$20,000 for the first time on December 16, 2020.
The second-biggest cryptocurrency, ethereum was not left out of the crypto market rally. ETH which usually trades in tandem with BTC hit a 3 year high of $1,170 on Monday, January 4, 2021.
A New Record Trading Volume
The rally saw the crypto market effectively set a daily trading volume high. The overall daily trading volumes in cryptocurrencies hit $340 billion, marking its highest-ever figures. A U.K. research firm CryptoCompare showed on Tuesday that daily volumes had averaged US$13.1 billion in 2020.
The record trading volumes can be directly linked to the rally. Crypto trading volumes regularly spike during periods of extreme price swings. This shows the central role of speculative traders in digital currency trading.
On the Flipside
- The crypto market rally continues today, with Bitcoin showing a +7 percent daily gains. Bitcoin now trades above $35,000.
- A new report states that Gojek and Tokopedia discussing an $18 billion merger
- This comes amid talks from J.P. Morgan Chase, Amazon, and Berkshire Hathaway to dissolve their joint healthcare venture Haven.
Top 3 Crypto Contributors
The three biggest cryptocurrencies (by market cap) contributed approximately 78 percent to the record $340 billion 24 hours trades. The 3 cryptos are Bitcoin (BTC), Ethereum (ETH), and Tether (USDT).
Tether made the most contributions with $125, 906,387,011. Over the same period BTCs worth $81,163,475,344 and ETHs worth $56,945,985,763 were traded globally.
Bitcoin After the Surge
After peaking on Sunday, January 3, Bitcoin experienced a sharp price drop on Monday. Bitcoin traded as low as $31,000 before recovering losses.
Another brief surge happened on Wednesday, January 6 as Bitcoin peaked at $35,200. Bitcoin currently trades around the $35k mark with a market cap of $640 billion.
One of the major things driving the rally is the perception that cryptos (particularly Bitcoin) can act as a hedge against the risk of inflation.
This perception is becoming popular because governments and central banks are said to have overprinted fiat money as a protection measure against the COVID-19 pandemic. This has greatly increased the demand for Bitcoin.