According to an index maintained by CoinGecko, which tracks the price of 6,129 distinct coins, the total crypto market capitalization is up roughly 8% in the last 24 hours and has now outstripped the previous high of $760 billion by a significant margin.The world’s first and most famous cryptocurrency, Bitcoin, is responsible for 67.7% of the market’s value, followed by the currency of the Ethereum network (ETH) at 13.3%.
Crypto market capitalization
The arrival at this new milestone can be attributed in large part to the spectacular rise in the price of Bitcoin in recent months, although groundswell has also seen many altcoins appreciate in price.
Bitcoin is currently hovering at a valuation of circa $37,000 per coin, up from just $14,000 at the start of November, while ETH has broken the $1,000 mark for the first time since 2018, recording a price increase close to 800% in the last twelve months.
Rising confidence in cryptocurrency is also demonstrated by institutional investment. In recent months, insurance giant MassMutual has purchased $100 million-worth of Bitcoin and tech firm MicroStrategy has converted most of its balance sheet (circa $500 million at the time of initial purchase) to the cryptocurrency. It is thought to be just a matter of time before institutional investors pile into Ethereum as well.
However, while commentators believe Bitcoin could settle at a far greater valuation in the long-term, the consensus is that this latest run will be followed by a significant correction, posing a risk for investors unlucky enough to come in at the peak.
As many found out the hard way in 2018, the difficulty is in predicting precisely when a bull run such as this has run its course, and so caution is advised.