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For the first time ever, the market value of cryptocurrencies surpassed $2 trillion, according to data from market trackers, Blockfolio and CoinGecko. The record-breaking figure is the result of a steady increase in gains over recent months. This increase led to heightened demand from both institutional and retail investors, as well as the cryptocurrency market doubling in value this year.
Bitcoin, the oldest and largest cryptocurrency, was instrumental to the surge. Its own value is positioned at around $60,000 per bitcoin (a lifetime milestone of its own), and it is worth more than $1 trillion by market cap. Analysts suspect that so long as its value remains above $53,000, it will maintain its 13-digit market cap.
But the barrier was broken by the additional price surges of smaller cryptocurrencies, too. Generally, there is significant growing interest in crypto, which is expanding far beyond the most well-known coins. After Bitcoin, the five biggest cryptocurrency coins by market cap are Ethereum, Binance Coin, Ripple, Tether, and Polkadot.
Ethereum, the second-largest cryptocurrency in terms of market cap with a total value of around $250 billion, and Binance Coin are also leading the charge. This is due to a sharp rise in interest in decentralized finance (DeFi). DeFi is a system that allows buyers, sellers, lenders, and borrowers to communicate directly with each other or through a software-based intermediary instead of going through a bank.
Institutional investors have been dabbling in crypto recently, looking to boost cash returns in the near-zero interest rates arena. Most notably, Tesla Inc. started accepting Bitcoin as payment for cars while also pouring $1.5 billion into the cryptocurrency. Another to jump on the crypto bandwagon is Morgan Stanley. The investment bank now allows some of its wealthiest clients to add Bitcoin to their portfolios. Firms from Mastercard Inc. and PayPal Inc., as well as BNY Mellon, are putting measures in place so that they can embrace the token, too.
Bitcoin advanced further when the world’s largest institutional holder of the crypto, Grayscale Bitcoin Trust, announced its plans to convert the trust into an exchange-traded fund (ETF). According to the publicly listed investment vehicle, its commitment to do so will depend on the regulatory environment.
This impressive leap in value has left cryptocurrency traders feeling particularly optimistic. As the industry evolves, more and more people are getting involved, and that is from all angles. Not only are more individuals and companies investing in cryptos, but analysts expect to see more blockchain-based applications to be introduced, too.
Breaking the $2 trillion barrier is likely to spark even more interest in both Bitcoin and altcoins, so many believe that this upward trend will continue for some time.
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