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The global cryptocurrency market has hit a remarkable $3.2 trillion, according to CoinGecko, marking a significant milestone for digital assets.
This surge comes amid optimism over Donald Trump's election as US president, with hopes that his leadership will bring clearer regulations for digital currencies. Market participants are also encouraged by the election of pro-crypto lawmakers who may promote more favourable policies.
The surge in the market value has been nothing short of stunning, especially when compared to the flatlining prices and uncertainty seen just months ago.
Bitcoin, the world's leading cryptocurrency, continues to dominate the market. On Nov. 14, its value reached an all-time high of $93,480, contributing significantly to the overall market surge. Matthew Dibb, the chief investment officer of cryptocurrency asset manager Astronaut Capital, explained that Bitcoin often leads the way, followed by other altcoins as capital rotates through the ecosystem. This phenomenon is being observed as the overall market cap increases, buoyed by Bitcoin's growth.
The surge in Bitcoin's value is not just due to a favourable regulatory outlook in the US Bitcoin's price has doubled this year and jumped by 30% since the US election on November 5. Other cryptocurrencies have also seen impressive gains, with Ether up 33% to $3,220 and Dogecoin soaring by 140%, driven in part by support from billionaire Elon Musk, a Trump ally.
Market participants have noticed an increased interest in crypto exchange-traded funds (ETFs), possibly indicating that financial institutions are becoming more comfortable with crypto assets. While many institutions traditionally shy away from holding cryptocurrencies directly, ETFs allow them to gain exposure to the sector without directly owning digital assets.
Carl Szantyr, the founder of Blackstone Capital, suggested that reaching $100,000 for Bitcoin by the end of the year is "feasible," given the current momentum and market trends.
Despite the bullish trend, not all parts of the cryptocurrency ecosystem have fully recovered. For example, non-fungible tokens (NFTs) have shown only modest price increases, with average sales prices hovering around $2,700, up from a low of $2,000 in May. In addition, DBS Bank in Singapore noted that while trading volumes had surged, investors were not yet exploring the more speculative corners of the crypto market, such as decentralized exchanges or exotic platforms.
However, experts are optimistic that the increased attention in the market could lead to broader interest in decentralized finance (DeFi) and blockchain-based solutions. Danny Chong, co-founder of decentralized asset platform Tranchess, emphasized that the renewed focus on the market could foster a deeper interest in blockchain applications like tokenizing real-world assets and developing blockchain-based payment systems.
While the cryptocurrency market still remains a fraction of traditional asset classes like gold and the S&P 500, its growing value is undeniable. As digital currencies gain mainstream acceptance and regulation becomes clearer, the crypto market is poised to continue its upward trajectory, inviting both retail and institutional investors to join the wave.
