The market capitalisation for cryptocurrencies as a whole reached a landmark $2 trillion (£1.4tn) on Monday, according to market trackers including CoinGecko and Blockfolio.

The cryptocurrency market has seen strong gains since the beginning of this year, in part spurred by interest from large companies and investors such as Tesla and BNY Mellon.

Several market trackers showed the total market cap of digital currencies including Bitcoin, Ethereum and others reaching $2.02tn by mid-afternoon on Monday.

The market cap of all cryptocurrencies has doubled in only about two months’ time.

Institutional interest

Bitcoin, which dominates the cryptocurrency market, has doubled in value to about $58,858 since the beginning of this year and has a market cap of more than $1tn alone.

The next five biggest coins, Ether, Binance Coin, Polkadot, Tether and Cardano, are worth about $422bn combined.

Bitcoin advanced on Monday after Grayscale Bitcoin Trust, the world’s largest institutional holder of the cryptocurrency, with about $34bn under management, said it plans to convert the trust to an exchange-traded fund.

The asset has seen heightened interest in recent months as investors experiment with it as a possible hedge against inflation potentially caused by massive Covid-19 aid packages.

“Altcoins”, or digital coins other than Bitcoin, have increased their share of the overall cryptocurrency market capitalisation this year, with Bitcoin falling to 57 percent from around 73 percent at the start of the year, according to TradingView.

New highs

Ether recorded an all-time high of $2,100 last week, while Bitcoin has hit a landmark by retaining a market cap of over $1tn for an entire week.

“Momentum and interest have begun to expand beyond bitcoin and ethereum,” said Paolo Ardoino, chief technology officer at crypto exchange Bitfinex, in a research note.

He said he expects more blockchain-based applications to be introduced over time, causing a “surge of interest around other alternative assets”.

This year has also seen a surge of interest in non-fungible tokens (NFTs), which are built on blockchain technology and can act as proof of ownership of assets such as digital files or artwork.

Jack Dorsey sold his first-ever tweet last month for £2m in the form of an NFT.

Regulators and central banks continue to warn against cryptocurrencies, with India reportedly planning to outlaw their ownership.

Matthew Broersma

Matt Broersma is a long standing tech freelance, who has worked for Ziff-Davis, ZDnet and other leading publications

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