According to the CoinGecko website, the market value of digital currencies exceeded $ 1 trillion for the first time. The value of the digital currency market at its previous peak in late 2017 (96) had only reached $ 760 billion.
To Report Bitcoin Desk accounts for 69% of the total market value, according to the Messari website. Interestingly, traders are not surprised by the rapid increase in market value.
Qiao Wang, co-founder of DeFi Alliance, an accelerator in decentralized finance, answered the question of whether increasing the market value of digital currencies is a bubble. Says:
In the short term it has a little bubble.
Kiao Wang, who worked for Tower Research as a trader, went on to ask, “Is this funny?” In response to this question, he said “no”.
Over the past 12 months, the price of Bitcoin and other digital currencies has risen as wealthy institutional investors have shown increasing interest in Bitcoin. In addition, a group of new micro-investors have followed suit and expressed interest in investing in coin tins.
The price of Bitcoin increased by 25% in January, which is a continuation of the 300% return trend in 2020. Ethereum prices have also risen in the past 12 months, and after reaching above $ 1,200 in trading on Wednesday, for the first time since early 2018 (1397), the return has reached more than 860%.
“Purdy analyst Jack Purdy at Masari says:
The $ 1 trillion market value makes digital currencies a viable investment asset class and is no longer seen as a toy for small investors on the fringes of traditional markets. This shows that this asset class is large enough to attract large orders, as we have seen recently with the entry of a number of institutions into the field in recent months.
Some of these large investments have been made by companies such as MicroStrategy, which operates in the field of technology. The company has purchased more than 70,000 bitcoins and plans to purchase more. London-based asset management company Ruffer Investment also invested about $ 740 million in bitcoin by the end of 2020.
Qiao Wang says:
Digital currencies are now almost a risky investment option at the institutional level. The market is liquid enough to use a large amount of capital; But it is still too early for a 10-fold return.
For some investors, such returns are achieved through Altcoins. If Bitcoin continues to rise above $ 30,000, Altcoins will accelerate.
According to FTX markets, the top 10 Altcoin index has returned more than 30% in 2021. The shitcoin index, which represents limited market value coins, also rose more than 20 percent in January.
“Nate Maddrey, a market research analyst at Coin Metrics, said in a message to Kevin Desk:
The $ 1 trillion market value is a major turning point for digital currencies. Especially since that number was less than $ 200 billion a year ago; However, the total market value of digital currencies is still negligible compared to gold, stocks and many other assets.
Institutional buyers and small speculators alike can find everything from six coins to pioneering assets like bitcoin to something that stimulates interest in this newly discovered trillion-dollar market.
A mother says:
Digital currencies are in a unique position to become the most important asset class of the 21st century and still have a lot of room for growth.