In 2021, bitcoin and ether have seen huge increases. In April 2021, the cryptocurrency market surpassed $ 2 trillion in value for the first time.
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GUANGZHOU, China – The value of the cryptocurrency market surpassed $ 2 trillion for the first time on Monday fueled by a rally in ether, the second-largest digital currency.
In just over two months, the market capitalization of the cryptocurrency market has doubled, according to price-tracking website CoinGecko, as retail and institutional investors pile up in the space.
Bitcoin, the largest digital currency, accounts for more than 50% of the total cryptocurrency market capitalization. Bitcoin has rallied over 100% this year alone, and that has helped drive the cryptocurrency market higher.
Last month, bitcoin hit a record high of over $ 61,000. The digital currency was trading at around $ 58,800 on Tuesday, according to data from Coindesk.
But the latest push in the cryptocurrency market appears to have been powered by ether, the digital currency that powers the Ethereum blockchain.
Bitcoin also runs on a technology called blockchain, which is a public record of activity and a way to transact using cryptocurrency. In comparison, the Ethereum blockchain is more like a software platform that allows developers to build applications on top of it. Users can spend ether on these apps.
So-called smart contracts are a key feature of Ethereum. These are contracts that can be automatically executed through code.
There is growing enthusiasm for the use of Ethereum in so-called decentralized finance applications, or DeFi. These are blockchain-based financial services, such as loans, that could in theory bypass banks and brokerages. Users of these applications can carry out transactions using cryptocurrencies.
Ethereum also has the underlying technology behind the recent craze for non-fungible tokens, or NFTs, a new type of digital asset.
Billionaire investor Mark Cuban owns ether and said it is the “closest we have to a real currency.”
Ether hit an all-time high of $ 2,151.25 on Tuesday morning Singapore time, according to CoinDesk. It has increased more than 180% so far this year.
The digital currency is also generating interest among companies. Chinese app maker Meitu bought ether for $ 22.1 million last month, making it one of the first major companies to do so.
Bitcoin continues to be the powerhouse of the cryptocurrency market, and the past few months have seen a huge surge in interest among businesses and large institutional investors.
Tesla and Square are among a handful of companies that have bought bitcoin.
Meanwhile, major investment banks are exploring ways to enable clients to engage in investments in digital assets. In March, CNBC reported that Morgan Stanley became the first major US bank to offer its wealth management clients access to bitcoin funds. CNBC also reported last month that Goldman Sachs is preparing to launch its first investment vehicles for bitcoin and other digital assets to clients in its private wealth management group.
There is also hope among investors for an expanding portfolio of investment products and many are watching Grayscale Investments, which runs one of the largest publicly traded bitcoin funds. It is known as the Grayscale Bitcoin Trust.
The company said Monday that it is “100% committed” to converting that trust into an exchange-traded fund or ETF. That would effectively track the price of bitcoin and allow traders to reproduce the price movement without owning the cryptocurrency itself. It could be a way for more investors to get involved in the bitcoin market.