Crypto Market Cap Close To $ 2 Trillion, What To Expect From The Market

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The crypto market is approaching a market cap of $ 2,000 billion with every rally. Total market capitalization had collapsed after its peak in May when the overall market experienced a price collapse. Since then, the movement in market capitalization has fluctuated between slight rallies and lows. The total crypto market cap had collapsed to as low as $ 1.2 trillion at some point in June.

Market capitalization has now resumed its ascent, with the price of the best coins showing huge gains in the market. Going back to $ 2 trillion remains an important point for the market in general. The total crypto market cap has gained over $ 500 billion in the past three weeks. Peaking at the current market cap value of over $ 1.8 trillion.

Related reading | Bitcoin Accumulation Patterns Show The Rally May Be Just In The Beginning

Rise in prices after a market cap of $ 2 trillion

A surge in prices will certainly follow the crypto market reaching a market cap of $ 2,000 billion. The last time the total market cap hit $ 2 trillion, the price of bitcoin surpassed $ 60,000. With Ethereum exceeding $ 4,000.

Total market cap nears $2 trillion mark | Source: Crypto Total Market Cap from TradingView.com

Market capitalization figures are calculated by multiplying the current circulating supply of an asset by the current price of that asset. The total market capitalization of the crypto is then obtained by adding all the market capitalizations of the cryptocurrencies active in the market. This means that the higher the price of an asset, the higher the market capitalization of that asset.

By extension, this leads to an increase in the total market capitalization. As coins continue to see their prices rise, the total market cap will continue to grow, which so far has continued to climb steadily to $ 2 trillion.

Crypto becomes more valuable

As inflation rages across countries and wages, with interest rates not rising to keep pace with the rate of inflation, individuals and institutions will continue to seek alternatives that will provide adequate hedging against the growth of inflation. Investors have now turned their attention to crypto.

Coins like bitcoin are deflationary in nature, which means that they are designed to become scarce over time. With only 21 million coins programmed to enter circulation, bitcoin is the perfect hedge against inflation. This has caused investors to rush into the crypto market to own a portion of an asset that will appreciate at a rate faster than the rate of inflation.

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The new version EIP-1559 which sees ETH fees burnt instead of being rewarded to miners also puts Ethereum on the path to deflation. This sparked renewed interest in ETH as one of the cryptocurrencies that can help protect against inflation over time.

Indicators continue to show that total market capitalization will continue to recover following increased interest in the market. $ 2 trillion continues to be the value target for the market.

Featured image from CoinMarketCap, chart from TradingView.com



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