In 2021, bitcoin and ether have seen massive rallies. In April 2021, the cryptocurrency market hit $ 2 trillion for the first time.
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GUANGZHOU, China – The value of the cryptocurrency market first hit $ 2 trillion on Monday, driven by a rally in ether, the second largest digital currency.
In just over two months, the cryptocurrency market’s market cap has doubled, according to price-tracking website CoinGecko, as retail and institutional investors pile into the space.
Bitcoin, the largest digital currency, accounts for more than 50% of the total cryptocurrency market cap. Bitcoin has risen more than 100% this year alone, and that has soared the cryptocurrency market.
Last month, bitcoin hit a record high of more than $ 61,000. The digital coin traded at around $ 58,800 on Tuesday, according to data from Coindesk.
Ether rally
But the latest boost in the cryptocurrency market appears to have been driven by ether, the digital currency that powers the Ethereum blockchain.
Bitcoin also runs on a technology called blockchain, which is a ledger of activities and a way for transactions to take place using the cryptocurrency. In comparison, the Ethereum blockchain is more like a software platform that allows developers to build apps on top of it. Users can then spend ether on these apps.
So-called smart contracts are an important feature of Ethereum. These are contracts that can be automatically executed with code.
There is growing excitement about using Ethereum in so-called decentralized financing or DeFi applications. These are blockchain-based financial services, such as lending, that could theoretically bypass banks and brokers. Users of these apps can make transactions using cryptocurrency.
Ethereum also has the underlying technology behind the recent craze in non-replaceable tokens, or NFTs – a new type of digital asset.
Billionaire investor Mark Cuban owns ether and said ether is “the closest thing to a real currency.”
Ether hit a record high of $ 2,151.25 on Tuesday morning Singapore time, according to CoinDesk. It is up more than 180% so far.
The digital currency is also seeing interest from companies. Chinese app maker Meitu bought $ 22.1 million worth of ether last month, making it one of the first major companies to do so.
Bitcoin interest
Bitcoin still remains the powerhouse of the cryptocurrency market and has seen a major surge in interest from corporations and major institutional investors in recent months.
Tesla and Square are among a handful of companies that have bought bitcoin.
Meanwhile, major investment banks are exploring ways to enable clients to get involved in digital asset investments. In March, CNBC reported that Morgan Stanley was the first major US bank to offer its wealth management clients access to bitcoin funds. CNBC also reported last month that Goldman Sachs is gearing up to launch its first investment vehicles for bitcoin and other digital assets to clients of its private wealth management group.
There is also hope among investors for a growing portfolio of investment products and many are looking to Grayscale Investments, which manages one of the largest publicly traded bitcoin funds. It is known as the Grayscale Bitcoin Trust.
The company said Monday it is “100% committed” to turning that trust into an exchange traded fund, or ETF. That would effectively track the price of bitcoin and allow traders to play the price movement without owning the cryptocurrency itself. It could be a way for more investors to get involved in the bitcoin market.