Paypal, Visa, Mastercard, etc., have shown interest in Bitcoin. (File Photo)
It was $1.15 trillion on February 5, 2021, when Bitcoin was nearing the $37,800 price, and Ethereum was at $1,724. Cut to May 3, 2021: Bitcoin is now 53 percent up at $58,000, Ethereum 83.8 percent to $3,170, and the combined market cap of all cryptos has now doubled. According to the data from CoinMarketCap, the overall market cap of 9,541 coins had briefly touched the $2.3 trillion mark on Monday as investors’ craze around Bitcoin and other cryptocurrencies continued. However, the total market cap fell back to $2.28 trillion when filing this report.
“Though it seems to be a sudden growth within three months, the gain in momentum had started at the beginning of 2020 when many western Institutions began investing in this new asset class. Tesla, Facebook, Paypal, Visa, Mastercard, many hedge funds, and even family institutions have shown interest in cryptocurrency as a hedge against their traditional investments. With these Wall Street stalwarts coming in to support the adoption, we believe we are still at the beginning of a major curve ahead,” Vikram Subbura, Co-Founder and CEO of Giottus Cryptocurrency Exchange, told Financial Express Online.
The institutional interest in the crypto ecosystem has been among the key drivers for its growth. Investment banks such as Morgan Stanley and JPMorgan have also started offering their wealthy clients access to Bitcoin funds. Moreover, the direct listing of crypto exchange Coinbase last month was a watershed event in the short history of the global crypto ecosystem. This also marked the growing acceptance of cryptocurrencies in mainstream finance. The milestone would also let crypto advocates push for digital assets’ proliferation.
Also, read: Did Elon Musk sell his Bitcoin? No. Tesla CEO explains why his company sold 10% of its holding.
“Bitcoin market cap has increased from $700 billion three months ago to about $1.1 trillion. Ethereum’s market cap has also doubled from about $180 billion three months ago to over $360 billion. In my opinion, when we speak of Decentralized Finance (DeFi), many projects were added to DeFi in the last quarter. We have also witnessed the total value locked in DeFi double this time from $35 billion to about $72 billion. Moreover, the non-fungible token (NFT) marketplace has taken the world by storm. More and more NFT creation has made the market more excited about the Decentralized Finance protocols. These are the three major reasons to drive the market cap of cryptos,” Ashish Mehta, Co-founder of DigitX, told Financial Express Online.
DeFi is a decentralized finance project with lending or borrowing over a decentralized platform, exchanges, yield farming protocols, insurance, etc. On the other hand, NFTs are artworks or unique memes, collectibles in tokenized forms offered over a brilliant contract-supported digital auction medium. For example, a digital painting by artist Beeple was sold for $69 million in March through an NFT marketplace offering. However, most fund managers continue to believe in Bitcoin as a bubble. As per the April 2021 Global Fund Manager Survey of around 200 institutional, mutual, and hedge fund managers globally by Bank of America, 74 percent of respondents believed Bitcoin to be a bubble, while only 16 percent disagreed.
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