The crypto industry is experiencing some of the best moments this year as it hits an iconic $1 trillion market cap. The latest development is not unusual since cryptocurrencies are performing very well, primarily since late last year with attractive new gains. Bitcoin reached some incredible points in 2020 since it crossed over its resistance point, and then it has surged at an alarming rate.
The new prices attract more investors, thereby increasing the market cap over time. Other coins are not left behind in the performance game, as Ethereum and other altcoins gained immensely within the one month bracket, from late December to January. Bitcoin carries most of the market’s weight, with over $600 billion for the digital asset alone, practically dwarfing other cryptos.
Three top digital asset carries weight
Not many people foresaw the blockchain-based industry’s rapid success, with many criticizing and implying that the tech was a bubble. The three most significant digital assets remain the strongest hold of the industry. Bitcoin holds almost 70% of the market, especially since institutional buyers have a thing for the digital asset.
Large amounts of monies went into Bitcoin alone last year since there was a massive demand for crypto at that point, and big players went all out to grab chunks of Bitcoin for themselves. 2020 was generally the year that changed everything for the currency and created a basis for the increased market cap by January. The small industry grew by over 400% within one year, linked to Bitcoin’s adoption.
Apart from Bitcoin’s dominant grip on the market, Ethereum is also doing well as an altcoin. ETHs surge alongside the crypto giant, Bitcoin. The digital asset also released phase 0 of the stages it would undergo on its new tech adoption. Unlike BTC, ETHs are more complicated to understand, being the primary reason their adoption is not as prominent as it should be.
Institutional investors are also interested in Ethereum, especially since it holds second place amongst the dominant cryptocurrencies. Its market cap is over $60 billion, which is quite a distance from BTC. USDT holds third place with a market cap of over $20 billion; the stablecoin is the only stablecoin in the top 5 and pegged to the American dollar. The coin gained incredible exposure, and that shot it to the third-place above Litecoin.
A search for the second gold
Bitcoin is the world’s preferred cryptocurrency, and it competes with the yellow metal on many bases. The two assets are similar, with scarce, a store of value, and moveable assets. The unexpected outflows from gold in 2020 could mean investors were putting more from their gold investments to others like cryptocurrency. The limited supply of both makes them incredibly valuable, unlike money.
Entrepreneurs and individuals complain about how Federal governments keep printing more money than they need to keep inflation in check. Due to lots of money in circulation, money loses value, thereby causing inflation. It’s safe to note that unlike Bitcoin that has controlled mining, gold does not. Every year, gold mining increases by some percentages ruining the scarcity factor.
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