The crypto market is witnessing its best performance since May 2022, with Bitcoin and Ethereum surging to $41,000 and $2,200 highs as the crypto market gains momentum, respectively. The latest rally has taken the total crypto market cap to $1.54 trillion, a 2023 high.
Experts say the growing confidence in the crypto market has been fuelled by expectations of the US Federal Reserve cutting interest rates in 2024 and the eventual approval of a Bitcoin ETF, which could drive up the price of the world’s largest cryptocurrency.
Crypto market cap reaches $1.54 trillion
The crypto market cap, which measures the total value of all the cryptocurrencies in circulation, reached a new high of $1.54 trillion on Thursday, December 7, 2023, according to data from CoinMarketCap. This is the highest level since May 2022, when the crypto market cap peaked at $1.63 trillion before plunging to $1.19 trillion in June 2022. The crypto market cap has recovered by 29% since then, thanks to the strong performance of the leading crypto assets, especially Bitcoin and Ethereum.
The crypto market cap is an important indicator of the health and growth of the crypto industry, as it reflects the demand and supply of crypto assets, as well as the innovation and adoption of crypto technologies.
A higher crypto market cap means that more people are investing in and using cryptocurrencies and that more value is being created and exchanged in the crypto space.
Bitcoin breaks $41,000 barrier
Bitcoin, the most popular and valuable crypto asset, has gained over 20% in the past week, reaching its highest level since June 2022. The digital currency has been boosted by several positive developments, such as the adoption of Bitcoin as legal tender by El Salvador, the launch of a Bitcoin futures ETF by ProShares, and the endorsement of Bitcoin by influential figures like Elon Musk and Jack Dorsey.
El Salvador became the first country in the world to make Bitcoin a legal tender on September 7, 2023, allowing its citizens and businesses to use Bitcoin as a medium of exchange, store of value, and unit of account. The move was aimed at increasing financial inclusion, reducing remittance costs, and attracting foreign investment.
However, the implementation of the Bitcoin law faced some challenges, such as technical glitches, protests, and legal disputes. Despite these hurdles, El Salvador’s President Nayib Bukele claimed that the Bitcoin adoption was a success and that more than 2.1 million Salvadorans were using the government’s official Bitcoin wallet, Chivo.
ProShares, a leading provider of exchange-traded funds (ETFs), launched the first Bitcoin futures ETF in the US on October 19, 2023, under the ticker symbol BITO. The ETF tracks the performance of Bitcoin futures contracts traded on the Chicago Mercantile Exchange (CME), which are regulated by the Commodity Futures Trading Commission (CFTC).
Related Topic: How to buy Bitcoin in India?
The ETF allows investors to gain exposure to the price movements of Bitcoin without having to buy, store, or secure the actual Bitcoin. The ETF was met with huge demand, as it traded more than $1 billion worth of shares on its first day, making it the most successful ETF debut in history.
Elon Musk, the CEO of Tesla and SpaceX, and Jack Dorsey, the CEO of Twitter and Square, have been vocal supporters of Bitcoin, and have influenced the public perception and adoption of the cryptocurrency. Musk announced in February 2023 that Tesla had bought $1.5 billion worth of Bitcoin and would accept it as a payment option for its electric vehicles.
However, he later reversed his decision in May 2023, citing environmental concerns over the high energy consumption of Bitcoin mining. He then reinstated his support for Bitcoin in July 2023, after confirming that Tesla would resume accepting Bitcoin payments once the mining industry becomes more renewable.
Dorsey, on the other hand, has been consistent in his advocacy for Bitcoin and has integrated it into his businesses. He launched Square Crypto, a division of Square that focuses on developing open-source projects for the Bitcoin ecosystem. He also announced that Twitter would enable users to tip each other with Bitcoin through its Tip Jar feature and that Square would build a Bitcoin hardware wallet to make it easier and safer for users to store and spend their Bitcoin.
Ethereum surpasses $2,200 level
Ethereum, the second-largest crypto asset by market cap, has also seen a strong uptrend, breaking the $2,200 resistance level for the first time since May 2022. The smart contract platform has benefited from the growing demand for decentralized applications (DApps), non-fungible tokens (NFTs), and decentralized finance (DeFi) protocols, which run on the Ethereum network. Ethereum is also undergoing a major upgrade, known as Ethereum 2.0, which aims to improve its scalability, security, and energy efficiency.
DApps are applications that run on a distributed network of computers, without the need for a central authority or intermediary. They offer various services and functions, such as gaming, social media, e-commerce, and more. According to DappRadar, over 4,000 DApps are running on the Ethereum network, with more than 2.5 million active users and over $20 billion in transaction volume in the past 30 days.
NFTs are unique and indivisible digital tokens that represent ownership of various forms of digital or physical assets, such as art, music, videos, collectibles, and more. They are created and traded on the Ethereum network, using the ERC-721 or ERC-1155 standards.
NFTs have exploded in popularity and value in 2023, as more artists, celebrities, and brands have embraced them as a new way of expressing their creativity and reaching their fans. According to NonFungible, the total sales volume of NFTs on the Ethereum network has reached over $10 billion in 2023, with more than 1.5 million buyers and sellers.
DeFi is a movement that aims to create an open, permissionless, and transparent financial system that operates on the Ethereum network, without the need for intermediaries or centralized institutions. DeFi protocols offer various financial services and products, such as lending, borrowing, trading, investing, and more. According to DeFi Pulse, there are over 200 DeFi protocols on the Ethereum network, with more than $80 billion locked in them.
Ethereum 2.0 is a long-awaited upgrade that will transition the Ethereum network from a proof-of-work (PoW) consensus mechanism, which relies on miners to validate transactions and secure the network, to a proof-of-stake (PoS) consensus mechanism, which relies on validators to stake their Ether (ETH) tokens and participate in the network governance.
The upgrade will also introduce sharding, which will split the network into multiple parallel chains, called shards, to increase its throughput and scalability. The upgrade will make the Ethereum network more efficient, secure, and sustainable, as it will reduce its energy consumption and carbon footprint while increasing its speed and capacity. The upgrade is expected to be completed by the end of 2024, after several phases and milestones.
Platinx: a leading crypto exchange platform
Platinx, an Indian crypto exchange app, is one of the leading players in the crypto industry, offering a secure, fast, and user-friendly way to buy, sell, and trade various crypto assets. Platinx also provides high-value informative news content to its users, helping them stay updated on the latest trends and developments in the crypto space. Platinx aims to increase its brand awareness and customer base by delivering quality service and content to the crypto community.
Crypto market outlook and risks
The crypto market is expected to continue its bullish momentum in the coming months, as more investors, institutions, and governments embrace the potential of crypto assets. However, the crypto market is also subject to high volatility and risk, and investors should always do their research and exercise caution before investing in any crypto asset.
Platinx advises its users to follow the best practices of crypto security, such as using a hardware wallet, enabling two-factor authentication, and avoiding phishing scams. Platinx also reminds its users that the content provided by Platinx is for informational purposes only and does not constitute financial advice. Platinx encourages its users to consult a professional financial advisor before making any investment decisions.