Another record high: Bitcoin holds US$1.1 trillion market cap for a week

Analysts say as long as bBitcoin stays above US$53,000, it will be able to maintain its $1 trillion market cap.
Analysts say as long as bBitcoin stays above US$53,000, it will be able to maintain its $1 trillion market cap. Photo credit: Getty

The cryptocurrency market capitalisation hit an all-time peak of US$2 trillion on Monday, according to data and market trackers CoinGecko and Blockfolio, as gains over the last several months attracted demand from both institutional and retail investors.

By mid-afternoon, the crypto market cap was at $2.02 trillion.

The surge was led by bitcoin, which hit its own milestone by holding at a $1 trillion market cap for one week. Bitcoin was last up 1.4 percent at US$59,045 (NZ$83,500).

Since hitting a lifetime peak of more than US$61,000 in mid-March, bitcoin has traded in a relatively narrow range.

Analysts said as long as Bitcoin stays above US$53,000, it will be able to maintain its $1 trillion market cap.

Ethereum, the second-largest cryptocurrency in terms of market cap, was up 1.3 percent at US$2103. Its market cap was $244 billion on Monday.

It hit a record high of $2144.99 last Friday.

"Momentum and interest have begun to expand beyond bitcoin and ethereum," said Paolo Ardoino, chief technology officer at crypto exchange Bitfinex.

"As the industry continues to mature, we expect more blockchain-based applications to be introduced to the world, and coinciding with that, a surge of interest around other alternative assets - as they become more market-ready," he added.

Blockchain data provider Glassnode, in a research report, said the fact Bitcoin has held the $1 trillion market cap for one week is a "strong vote of confidence for bitcoin and the cryptocurrency asset class as a whole".

It added that on-chain activity continues to reinforce bitcoin's robust position, with a volume equivalent to over 10 percent of circulating supply transacting above the $1 trillion thresholds.

Also on Monday, Grayscale Bitcoin Trust, a $35 billion publicly listed investment vehicle that holds bitcoin, said it remains committed to converting to an exchange-traded fund. In a blog post, Grayscale said the timing of its transition would depend on the regulatory environment.

Bitcoin has risen more than 100 percent this year, while ethereum has gained nearly 190 percent. Both have massively outperformed traditional asset classes, bolstered by the entry of mainstream companies and large investors into the cryptocurrency world, including Tesla Inc and BNY Mellon.