For the first time, the total market value of cryptocurrencies surpassed $2 trillion, more than doubling in less than two months due to increased institutional demand. After more than doubling in price to $58,858 in 2021, Bitcoin, the largest of the more than 6,600 coins tracked by CoinGecko, is now worth more than $1 trillion. Bitcoin has traded in a relatively narrow range since hitting a lifetime high of more than $61,000 in mid-March.
The term market capitalization is used in the blockchain industry to describe a metric that determines the relative size of a cryptocurrency. It's calculated by multiplying a coin's or token's current market price by the total number of coins in circulation.
Ethereum, the second most valuable cryptocurrency by market capitalization, was up 1.3% at $2,103. On Monday, its market capitalization was $244 billion. Last Friday, it reached a new high of $2,144.99.
In a world of near-zero interest rates, institutional investors are dabbling in cryptocurrency as a way to boost cash returns. The total market capitalization of the digital-asset industry has risen to around $2 trillion, more than doubling in just a few months, thanks to price rallies for cryptocurrencies other than bitcoin.
Tesla Inc. invested $1 billion of its funds in Bitcoin and began accepting it as a form of payment for its vehicles. Morgan Stanley is allowing some of its wealthiest clients to invest in Bitcoin, and companies as diverse as Mastercard Inc. and PayPal Inc. have taken steps to embrace the cryptocurrency.
Grayscale Bitcoin Trust, the world's largest institutional holder of bitcoin, with $34 billion under management, said it plans to convert the trust to an exchange-traded fund, sending bitcoin higher on Monday.
Ether, Bittorrent, XRP, Tron, and stellar are among the "alternative cryptocurrencies," also known as altcoins. According to Messari data, they've all seen double-digit percentage growth in the last 24 hours.