In 2021, Bitcoin and ether have seen major rallies. In April 2021, the cryptocurrency market reached over $ 2 trillion for the first time.
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GUANGZHOU, China – The value of the cryptocurrency market topped $ 2 trillion for the first time on Monday, due to a rally in ether, the second largest digital coin.
In just over two months, the market cap of the cryptocurrency market has doubled as retail and institutional investors pile into the room, according to price tracking website CoinGecko.
Bitcoin, the largest digital currency, accounts for over 50% of the total market capitalization for cryptocurrencies. Bitcoin has gained over 100% this year alone, which has helped boost the cryptocurrency market.
Bitcoin hit a record high of over $ 61,000 last month. According to Coindesk data, the digital coin traded at around $ 58,800 on Tuesday.
However, the recent surge in the cryptocurrency market appears to be due to ether, the digital coin that powers the Ethereum blockchain.
Bitcoin also runs on a technology called blockchain, which is a public book of activity and is a way for transactions to take place using the cryptocurrency. In comparison, the Ethereum blockchain is more like a software platform that developers can use to create apps on it. Users can then spend ether on these apps.
So-called smart contracts are an essential feature of Ethereum. These are contracts that can be executed automatically with code.
The use of Ethereum in so-called DeFi applications (decentralized finance) is becoming more and more exciting. These are blockchain-based financial services like loans that banks and brokers could theoretically bypass. Users of these apps can carry out transactions with cryptocurrency.
Ethereum also has the underlying technology behind the recent craze for non-fungible tokens (NFTs) – a new breed of digital asset.
Billionaire investor Mark Cuban owns ether and said it is “the closest thing to the real currency”.
Ether hit an all-time high of $ 2,151.25 in Singapore on Tuesday morning, according to CoinDesk. It’s up over 180% since the start of the year.
The digital currency is also attracting interest from companies. Chinese app maker Meitu bought ether worth $ 22.1 million last month, making it one of the first major companies to do so.
Bitcoin continues to be the powerhouse of the cryptocurrency market and has seen a sharp surge in interest from companies and large institutional investors in recent months.
Tesla and Square are among a handful of companies that have bought bitcoin.
Meanwhile, major investment banks are looking for ways to give clients the opportunity to invest in digital assets. In March, CNBC reported that Morgan Stanley was the first major US bank to offer Bitcoin funds to its wealth management clients. CNBC also reported last month that Goldman Sachs is preparing to offer its first-ever Bitcoin and other digital asset investments to clients of its private wealth management group.
Investors are also hoping for a growing portfolio of investment products, and many are watching Grayscale Investments, which operates one of the largest publicly traded Bitcoin funds. It’s known as the Grayscale Bitcoin Trust.
The company said Monday it was “100% committed” to converting that trust into an exchange-traded fund or ETF. This would effectively track the price of Bitcoin and allow traders to play the price movement without owning the cryptocurrency itself. This could be a way for more investors to get involved in the Bitcoin market.