The global cryptocurrency market has reached a new high, with its total value surpassing $3 trillion for the first time, according to data aggregator CoinGecko. On November 14, the market capitalization peaked at nearly $3.2 trillion, marking a significant rebound from earlier in the year when crypto prices and trading volumes had stagnated.
This surge follows optimism triggered by the election of Donald Trump as U.S. president, which many see as a catalyst for more favorable cryptocurrency regulations in the U.S. As a result, investors are betting that these regulatory shifts could spark a new growth phase for the entire asset class.
Bitcoin, the dominant cryptocurrency, has led the charge, reaching an all-time high of $93,480. Matthew Dibb, CIO of Astronaut Capital, noted that typically when Bitcoin breaks out, other cryptocurrencies (altcoins) follow suit in the rally.
Market participants also reported strong demand for cryptocurrency exchange-traded funds (ETFs), which are often favored by institutional investors who may be reluctant to hold cryptocurrencies directly. This trend suggests growing institutional interest in the crypto market.
Carl Szantyr, founder of Blockstone Capital, stated that while Bitcoin enthusiasts are known for making bold predictions, reaching $100,000 by the end of the year now seems within reach.
A Wild Ride: Crypto's Boom and Bust Cycle
This latest rally is just another chapter in the volatile history of cryptocurrencies. Bitcoin was trading below $20,000 at the beginning of last year during the "crypto winter" that followed the collapse of major projects like the FTX brokerage.
However, cryptocurrencies still lag far behind traditional asset classes in terms of market value. For comparison, the total value of all the gold ever mined is around $19 trillion, and the S&P 500's market capitalization is $50.6 trillion.
Despite the overall market surge, some sectors of the crypto ecosystem show slower recovery. For instance, non-fungible tokens (NFTs) have seen modest price increases since May, with the average sale price rising from around $2,000 to about $2,700, according to NonFungible.com. Additionally, while trading volumes on platforms like DBS Bank’s digital exchange in Singapore have surged, investors have not yet shown significant interest in more niche or decentralized parts of the market.
David Hui, chief commercial officer at DBS Digital Exchange, mentioned that while overall trading activity has increased, clients have not yet been shifting their assets to less mainstream platforms or decentralized exchanges.
Growing Interest in DeFi and Blockchain Innovations
Despite some caution, there is a growing sense of optimism in the industry. Danny Chong, co-founder of decentralized asset tracking platform Tranchess, pointed out that there’s increased interest in decentralized finance (DeFi) and other blockchain-based innovations. If this market momentum continues, it could lead to greater exploration of new themes such as tokenization of real-world assets and blockchain-based payment solutions.
As the market capitalization continues to rise, it’s expected to attract even more attention, potentially leading to deeper investments in both existing and new blockchain technologies.
Trump's Election Boosts Crypto Sentiment
The euphoria surrounding the crypto market is also partly attributed to the election of Donald Trump, along with the election of several pro-crypto lawmakers to Congress. This has helped ease concerns about the future of U.S. cryptocurrency regulations, fueling investor confidence.
Since Trump’s election on November 5, Bitcoin has risen by 30%, reaching $90,000, while Ether, the second-largest cryptocurrency, has gained 33%, reaching $3,220. Dogecoin, a more speculative token backed by billionaire Elon Musk, has surged by 140%.
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The content emphasizes providing valuable information and encourages readers to research before investing, reminding them that they are solely responsible for their crypto transactions and should exercise caution and due diligence.
