Global Cryptocurrency Market Cap Hits $1 Trillion
As the global digital currency sector rises to $1 trillion, investors are turning their attention to this asset group for diversifying their portfolios.
Just two weeks after ringing in the New Year the cryptocurrency market broker another record with hitting $1 trillion in a total of market capitalization. This record comes after a hectic 6-month long bull run, with the value of only $260 billion at the end of June. Bitcoin is still the number one digital currency that is leading this market cap domination, with the price exploding to $40.000. Just for comparison – the market cap is currently surpassed the digital giants such as Facebook, Alibaba, and Tencent. On the other hand, Ethereum is thriving as well with a $137 market cap as of late. This makes a rise of 62% just in 2021 for the asset. The cryptocurrency market is currently representing 1% of all the money in the world, which is totaled to $95 trillion.
Bitcoin Gains Take the Lead
Bitcoin has led a number of other digital assets down a winning streak which culminated on January 14 when this cryptocurrency hit a $40.000 mark for the first time since its establishment back in 2009. It is sufficient to say that 2021 gave more than a successful start of the year for Bitcoin, and the investors are only expecting further rises as the global economy recovers after a tough pandemic. Currently, the Bitcoin market capitalization is around $734 billion, gaining over 11% in just under 24 hours.
However, the experts are pointing out the historic data showing the general unreliability of the asset. Still, the pandemic seemed to be more than generous to the cryptocurrency industry, especially considering that the majority of business ventures switched to online completely or semi-regularly. No one can deny the fact that the digital era upon us is starting to take over each branch and sector of the industry, and cryptocurrencies are leading the way for the financial markets to recover again after a tough streak in 2020.
A Safe-haven Asset?
Digital currencies are taking unexpected roles, one of them being a safe-haven financial asset in times of difficulty and uncertainty on the global financial market. However, the US Department of Treasury is still warning that digital currencies have a long way to go before becoming a relevant and suitable currency in all our lives. In theory, cryptocurrency dominance is upon us, but there are still many technicalities and guidelines to be met before they become a standstill asset used in the countries of the world for everyday business and obligations. The main reason for it is the massive volatility of digital currencies, which makes them unpredictable and thus difficult to put into a category, let alone used as a tool to create a solid and lasting fiscal plan for the country’s financial system.
Based on the official information that was gathered by the global central banks, digital currencies are the fifth most circulated currencies in the world now. However, the experts are warning about another possible and sudden drop in value in the following weeks as the world awaits to see the results of the COVID-19 vaccines being distributed globally.
What About the Rest of the Digital Currency Market?
Following Bitcoin’s lead, Ripple has shown significant progress as well with its market cap rising to $13.6 billion and the value of $0.30 per unit. As for the newcomer Polkadot (DOT), this digital asset is trailing closely behind Ripple by gaining 21% in a single day. This ups its market cap to a total of $12.1 billion.
The recent rise in the cryptocurrency market value definitely comes as a surprise after the significant losses just a few days ago on Monday. Still, it is a sentiment to how volatile this market can get, with ups and downs as you’ve never seen before. The global tech giants are shifting their attention to the digital currency market as well, including JP Morgan and even some US Federal Reserve officials.