In 2021, bitcoin and ether have seen large concentrations. In April 2021, the cryptocurrency market surpassed $ 2 trillion in value for the first time.
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GUANGZHOU, China – The market value of cryptocurrencies topped $ 2 trillion for the first time on Monday driven by an ether rally, the second-largest digital currency.
In just over two months, the market capitalization of the cryptocurrency market has doubled, according to price monitoring website CoinGecko, as institutional and retail investors pile into the space.
Bitcoin, the largest digital currency, accounts for more than 50% of the total market capitalization of cryptocurrencies. Bitcoin has only increased by 100% this year alone and this has helped increase the cryptocurrency market.
Last month, Bitcoin hit a record high of $ 61,000. The digital currency was trading at about $ 58,800 on Tuesday, according to Coindesk data.
Ether rally
But the latest push in the cryptocurrency market seems to have been driven by ether, the digital currency that fuels Ethereum’s blockchain.
Bitcoin also works with a technology called blockchain, which is a public book of activities and a way to make transactions using cryptocurrency. In comparison, Ethereum’s blockchain is more like a software platform that allows developers to build applications on top of it. Users can spend ether in these applications.
So-called smart contracts are a key feature of Ethereum. These are contracts that can be executed automatically using code.
There is growing enthusiasm for the use of Ethereum in so-called decentralized financing applications or DeFi. These are financial services based on blockchains, such as loans, which in theory could bypass banks and brokers. Users of these applications can make transactions using cryptocurrency.
Ethereum also has the underlying technology behind the recent fad in non-expendable tokens, or NFT, a new type of digital asset.
Bitcoin interest
Bitcoin remains the power of the cryptocurrency market and, in recent months, has experienced great interest among companies and large institutional investors.
Tesla and Square are among a handful of companies that have bought bitcoins.
Meanwhile, major investment banks are exploring ways to enable customers to participate in investments in digital assets. In March, CNBC reported that Morgan Stanley became the first major U.S. bank to offer its wealth management clients access to bitcoin funds. CNBC also reported last month that Goldman Sachs is preparing to launch its first investment vehicles for bitcoins and other digital assets to clients of its private wealth management group.
There is also hope among investors for an expanding investment product portfolio and many are seeing Grayscale Investments, which manages one of the largest listed bitcoin funds. It is known as the Bitcoin Trust grayscale.
The company said Monday it is “100% committed” to turning that trust into a publicly traded fund, or ETF. This would effectively track the price of bitcoin and allow traders to play the price movement without having their own cryptocurrency. It could be a way to involve more investors in the bitcoin market.