Crypto Global

Cryptocurrency market cap tops $2 trillion for the first time

Apr 13, 2021

The crypto craze continues: the cryptocurrency market tops $2 trillion for the first time - doubling in just a few months. And this wasn't just powered by Bitcoin alone. What was the main reason for this development?

The interesting thing is that in addition to Bitcoin - with a market capitalization of USD 1 trillion - other large crypto market segments such as Ethereum and all other cryptocurrencies have gained momentum. Ethereum has recently hit a new all-time high, and the rest of those altcoins, as they are called, have been driving total market cap in recent weeks. It is Altcoins like Binance Coin as well as Bittorent, XRP and Stellar that have recorded double-digit percentage growth in the past few weeks. If you look at the Bitcoin Dominance chart below, which is a measure of how strong Bitcoin's market cap is compared to its total market cap of $2 trillion, you can see that it has already declined. At just 54 percent, that's the lowest level since June 2019. The real reason is that after Bitcoin got off to a good start in 2021, Altcoins - some of them - that we've covered in the past in our weekly newsletter, are in have had interesting results recently. These are, for example, projects in the DeFi and NFT areas.

Additionally, 'Robinhood' announced that 9.5 million of its customers were trading crypto through the company's platform in the first quarter of 2021. This is a big increase over the 1.7 million customers who traded crypto in the fourth quarter of 2020. Another big crypto news is that the big cryptocurrency platform 'Coinbase' announced that the first quarter of this year was a record breaking one. This company had sales of nearly $2 billion while trading volume grew more than 300%. In addition to Coinbase, 'Kraken', another US crypto exchange, is also considering a direct listing in 2022. The startup gained four times as many new users on the platform in the first quarter as it did last year. Kraken is currently in talks with investors about funding that could reportedly add up to $20 billion in company value.

Institutional adoption is an issue that cannot be ignored. This assumption is the main reason we saw this monumental price increase for Bitcoin and Altcoins. And if we want to find out where the price is likely to go, we need to watch closely the institutional impact.