November 18, 2024
By Our Correspondent
The global cryptocurrency market has surpassed a valuation of $3 trillion, driven by the election of Donald Trump as President of the United States, which has led to speculation that more favorable regulations could ignite a new surge across the entire asset class.
As reported by analytics and data aggregator CoinGecko, the total market capitalization of cryptocurrencies reached nearly $3.2 trillion early on November 14 in Asia. This figure exceeds the peak levels observed during the exuberant market conditions of 2021, when stimulus measures during the pandemic fueled speculative investments. It also represents a remarkable recovery from a few months prior, when cryptocurrency prices and trading volumes had stagnated, and the market sentiment was rather bleak. Bitcoin remains the dominant force in the market, and this significant market value milestone coincided with the cryptocurrency’s ascent to an all-time high of $93,480.
Matthew Dibb, Chief Investment Officer at cryptocurrency asset management firm Astronaut Capital, noted, “Typically, the market dynamics involve Bitcoin leading the charge, followed by a subsequent rally in altcoins. This indicates a gradual rotation of capital, which we can expect to contribute to an increase in the overall market capitalization.”
The election of Trump, along with the election of several pro-cryptocurrency lawmakers to Congress, has contributed to a wave of optimism by seemingly alleviating some of the uncertainties surrounding U.S. regulations. Bitcoin has experienced a doubling in value this year and has risen by 30 percent since the U.S. election on November 5, reaching $90,000. Meanwhile, the smaller cryptocurrency ether has increased by approximately 33 percent since the election, now valued at $3,220.
Additionally, Dogecoin, a highly volatile token endorsed by billionaire Trump supporter Elon Musk, has surged by 140 percent. Market participants have also noted a significant increase in the purchase of cryptocurrency exchange-traded funds, which may indicate institutional buying, as these entities typically prefer not to hold cryptocurrencies directly.
Bitcoin advocates are recognized for their audacious forecasts, and according to Carl Szantyr, founder and managing partner at Blockstone Capital, the prospect of reaching $100,000 by the end of the year appears plausible. This recent surge is part of the ongoing volatility that saw Bitcoin plummet below $20,000 at the beginning of last year, during the severe downturn known as the “crypto winter,” which followed the downfall of the FTX brokerage and other cryptocurrency ventures.
It is important to note that the market capitalization of cryptocurrencies remains significantly smaller than that of traditional asset classes. Currently, the total value of the 209,000 tonnes of gold, as reported by the World Gold Council, is nearly $19 trillion. In comparison, the market capitalization of the S&P 500 index stands at $50.6 trillion.
Certain segments of the cryptocurrency ecosystem continue to exhibit a lack of recovery, while others reflect a cautious sentiment. According to NonFungible.com, which monitors the Ethereum and Ronin blockchains, the average sales price for non-fungible tokens has hovered around $2,000 since May, with a slight increase to approximately $2,700. In Singapore, DBS Bank, which operates a digital exchange, reported a significant uptick in trading activity, having executed over one-third of last year’s total volume within the first ten days of November. However, investors have not yet ventured into the more niche areas of the market.
David Hui, chief commercial officer of DBS Digital Exchange, stated, “We have not observed our clients reallocating their assets towards more exotic platforms or decentralized exchanges.” Nevertheless, industry insiders believe that this renewed interest will generate momentum. Danny Chong, co-founder of the decentralized asset tracking platform Tranchess, remarked, “There is a growing interest and readiness to explore DeFi and other blockchain-related opportunities.” He added that if the increased market capitalization is maintained over a longer duration, it is likely to attract further interest in both new and existing themes, including the tokenization of real-world assets and blockchain-based payment solutions.