With each rebound, the crypto market is close to a market value of 2 trillion US dollars. The total market value plummeted after reaching its peak in May, when prices plummeted throughout the market. Since then, the market value has fluctuated between a slight rebound and a decline. At some point in June, the total market value of cryptocurrencies had fallen to $1.2 trillion.
The market value has now resumed its upward climb, and the prices of top tokens have made huge gains in the market. Overall, returning to US$2 trillion is still an important market point. In the past three weeks, the total market value of cryptocurrencies has exceeded 500 billion U.S. dollars. The current market value is over US$1.8 trillion.
The price soared after the market value reached 2 trillion U.S. dollars
As the cryptocurrency market reaches a market value of $2 trillion, prices will surely soar. The last time the total market value reached US$2 trillion, the price of Bitcoin exceeded US$60,000. Ethereum broke through $4,000.
Total market cap nears $2 trillion mark | Source: Crypto Total Market Cap from TradingView.com
The market value figure is calculated by multiplying the asset’s current circulating supply by the asset’s current price. Then, the total market value of the cryptocurrency is obtained by adding up all the market values of the cryptocurrencies that are active in the market. This means that the higher the price of an asset, the higher the market value of the asset.
By extension, this will lead to an increase in total market value. As the price of tokens continues to rise, the total market value will continue to grow, and so far, it has steadily climbed to US$2 trillion.
Encryption becomes more valuable
As inflation rages in the country and wages, and interest rates cannot keep up with the inflation rate, individuals and institutions will continue to look for alternatives to provide adequate hedges against rising inflation. Investors have now turned their attention to cryptocurrencies.
Coins like Bitcoin have a deflationary nature, which means they will become scarcer over time. Since only 21 million coins are programmed into circulation, Bitcoin provides a perfect inflation hedge. This has prompted investors to flock to the crypto market to own an asset whose appreciation rate will exceed the rate of inflation.
The new EIP-1559 version saw ETH fees burned rather than rewarded to miners, which also put Ethereum on a deflationary track. This has sparked new interest in ETH as one of the cryptocurrencies, which may help hedge against inflation over time.
Indicators continue to show that as market interest increases, the total market value will continue to rise. US$2 trillion is still the value target of the market.
Featured image from CoinMarketCap, chart from TradingView.com