Cryptocurrency Market Cap Hit $1 Trillion
As Bitcoin soared to great new heights in the most recent bull run, it took much of the crypto market with it. With Bitcoin holding over 60% of the market share and hitting one all time high after the next, traders witnessed another new record. For the first time in history, the entire cryptocurrency market cap hit $1 trillion.
The cryptocurrency market cap first peaked over the $1 trillion milestone on Thursday, 7 January 2021, eventually reaching highs of $1.115 trillion when Bitcoin quickly popped over the $40,000 mark.
Cryptocurrency Market Cap Hit $1 Trillion
Looking back over the previous all time high achieved by Bitcoin in 2017, the overall market value only reached $700 billion. Fast forward to 2021 and the market looks very different. With over 8,000 cryptocurrencies and 33,000 markets, the cryptocurrency industry is booming. Another, perhaps more prominent, reason is that over the past year as the pandemic turned markets upside down, Bitcoin proved to be a reliable asset. The original cryptocurrency pulled itself from the trenches and rose to new heights, pulling in over $10,000 above the previous record. This in turn attracted institutional investors, as well as retail investors looking to make both long term and short term returns.
Jack Purdy, data analyst at the crypto data, tools, and research firm, Messari shared that “The $1 trillion mark cements cryptocurrency as a investable asset class that no longer sits on the fringes of traditional finance as a toy for retail investors. It demonstrates that this asset class is large enough to absorb large orders like we’ve seen recently with the slew of institutions entering over the last few months.”
The cryptocurrency market has finally reached a point where it has enough liquidity to handle large investments, but is still young enough to be able to offer 10x returns. Proving to be an institutional-grade venture bet, the markets have seen a notable wave of institutional investment.
Altcoin Season
After gaining 300% in 2020, Bitcoin opened the new year gaining another 25% in January. While this is impressive, the second highest valued cryptocurrency based on market cap, Ethereum, also saw incredible gains over the previous year. Ethereum made approximately 860% over the 12 month period and traded over $1,200 in the first week of January, for the first time since 2018.
Other altcoins have also seen impressive gains. Crypto derivatives exchange, FTX, reported that the top 10 altcoins made over 30% in the first week of January 2021. While micro-cap altcoins weren’t far behind, also increasing by over 20% in that same timeframe. With 2020 finally bringing the crypto winter to an end, some altcoins are gearing up to have a lucrative year ahead.
Crypto In For A Bullish Decade
While these overall gains are impressive – and certainly a big milestone for all crypto enthusiasts – it is also worth noting that this is still merely a fraction of that of gold and other assets. Despite Bitcoin being named the top performing asset of the last decade, gold’s market cap currently sits at $10 trillion. As the crypto market continues to grow and increase in value, the next decade should prove to be as exciting as the last one.
“Crypto is in a unique position to be the most important asset class of the 21st century and still has a lot of room to grow,” Nate Maddrey, research analyst at Coin Metrics stated. As the cryptocurrency market hit $1 trillion in the opening week of 2021, we should be in for another very interesting ride.
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