The global cryptocurrency market cap has hit an unprecedented $3 trillion, driven by renewed optimism following Donald Trump’s recent election as U.S. President. Investors are anticipating more favorable regulatory policies under the new administration, which has boosted confidence in digital assets.
This surge in market value marks a new high, nearly reaching $3.2 trillion, surpassing the previous peak set in 2021 during a wave of pandemic-induced investments. Bitcoin, the largest cryptocurrency by market capitalization, has played a significant role in this rally, reaching a new all-time high of $93,480 on November 14, according to data from CoinGecko.
Bitcoin’s strong performance often sets the stage for gains across the broader cryptocurrency market, leading to increased interest in alternative coins. Matthew Dibb, Chief Investment Officer at Astronaut Capital, notes that “when Bitcoin breaks out, it typically paves the way for altcoins to follow, potentially driving further growth in the total market cap.”
Regulatory Optimism Boosts Crypto Sentiment
Trump’s election, along with the victory of several pro-crypto lawmakers in Congress, has fueled optimism in the digital asset space. The prospect of reduced regulatory uncertainties is seen as creating a more supportive environment for the cryptocurrency market.
Since the November 5 election, Bitcoin has surged by 30% to reach $90,000, while Ethereum has jumped 33% to $3,220. Dogecoin, a more volatile asset known for its association with Elon Musk, has soared by 140%. The rally extends to cryptocurrency exchange-traded funds (ETFs), which have seen increased buying activity, particularly from institutional investors seeking indirect exposure to digital assets.
Carl Szantyr, founder and managing partner at Blockstone Capital, is optimistic about Bitcoin’s future, stating, “With the current momentum, a $100,000 Bitcoin by year-end seems within reach.”
From Bear Market to Bullish Rally
The recent market surge represents a sharp rebound from last year’s “crypto winter,” during which Bitcoin struggled below $20,000 after the collapse of FTX and other major crypto firms. Despite the current gains, the $3 trillion market cap remains small compared to traditional assets like gold, which stands at $19 trillion, or the S&P 500 with a market cap of $50.6 trillion.
While the overall crypto market shows significant recovery, certain segments like non-fungible tokens (NFTs) are experiencing slower growth. According to NonFungible.com, the average NFT sale price remains steady at $2,700, up slightly from the $2,000 average earlier this year.
DBS Bank in Singapore, which runs a digital asset exchange, reports increased trading volumes since November, although clients are mostly sticking to well-established cryptocurrencies rather than exploring riskier decentralized exchanges.
Despite mixed performances across various sectors of the crypto ecosystem, industry players are hopeful that the rising market capitalization will spur interest in decentralized finance (DeFi) and blockchain innovations. Danny Chong, co-founder of DeFi platform Tranchess, expects the growing market cap to drive further development and adoption in the DeFi space.
