AUS
NZ
UK
CA
USA
IND
Source: Bingo TB, Shutterstock
Summary
- Bitcoin hit a new milestone on Monday after holding at a USD 1 trillion market cap for one week.
- A significant surge in Bitcoin’s value drove the total market cap of cryptocurrencies to USD 2 trillion recently.
- Bitcoin is expected to continue garnering importance in the mainstream investment portfolio.
The cryptocurrency fever has been taking hold of both institutional and retail clients over the recent months, stimulating demand for crypto assets like Bitcoin. The beloved cryptocurrency, Bitcoin, recently reached a new milestone on Monday by holding at a USD 1 trillion market cap for one week. The digital currency was last up 2.85% to USD 58,880.37 at the time of writing.
Tracked by CoinGecko, Bitcoin’s market cap hits a new record after its price more than doubled this year to over USD 58K. The gains in Bitcoin came after the world’s largest institutional holder of the cryptocurrency, Grayscale Bitcoin Trust, said it intends to convert the trust to an ETF.
A substantial surge in Bitcoin’s value pushed the total market cap of cryptocurrencies to USD 2 trillion on Monday. The market cap surged as gains over the past several months attracted interest from both retail and institutional investors.
The psychological USD 2 trillion barrier was broken not only by Bitcoin but by sharp increases in the price of smaller cryptocurrencies like Binance Coin and Ethereum.
Interestingly, the largest crypto exchange in the US, Coinbase, is planning to commence trading on Nasdaq, starting 14 April 2021. The IPO is expected to mark a big step for digital currencies into the financial mainstream.
Why are Cryptocurrencies Gaining Momentum?
The world has been going crypto crazy in the coronavirus era, with the pandemic-afflicted environment setting an ideal stage for the growth of the digital currency. Bitcoin quadrupled in value last year, breaking the USD 50k mark for the first time in February 2021.
The low interest-rate environment prevailing across the globe delivered a substantial push to the cryptocurrency space, urging traders to look away from interest-bearing investments. Much of the gains in Bitcoin has been driven by surging interest from huge US-based institutions like Tesla Inc.
The American automaker Tesla declared an investment of USD 1.5 billion in magic internet money – Bitcoin, marking the largest investment in the crypto asset by a mainstream corporation so far. Recently, the Company also started accepting digital currency as an alternate mode of payment. It means one can now purchase a Tesla with Bitcoin!
Tesla’s move follows digital payments company PayPal’s decision in 2020 to permit its customers to sell, buy and hold the crypto asset - Bitcoin from PayPal accounts directly. Encouraging the use of Bitcoin more thoroughly, PayPal has recently accepted Bitcoin for merchant payment.
Also Read: PayPal Goes Active on Crypto Space, Slew of News
The online payments processor has lately introduced its “Checkout with Crypto” service, allowing American customers to use their crypto holdings to make payment at millions of online merchants across the globe.
What Lies Ahead for Crypto Space?
The recent investments by big cheeses like Tesla are expected to drive other corporations’ interest in the buoyant cryptocurrency market over the months ahead.
Institutional investors are further anticipated to hop on the crypto bandwagon to bolster returns on cash in the prevailing low interest-rate environment. Furthermore, one can expect the introduction of more blockchain-based applications in the world, with cryptocurrencies becoming more mainstream.
However, one cannot neglect that the cryptocurrency market operates without a single administrator or central bank, and is more prone to erratic price movements. Besides, the risk of a probable burst in the Bitcoin bubble cannot be overlooked, given the event of the 2018 cryptocurrency crash.
Must Read: Cryptocurrency Boom: Blockchain Stocks to Look for In 2021
