The global cryptocurrency market cap regained $1.11 trillion this week for the first time since September 2022, with JC Market Research going so far as to estimate it at $1.4 Trillion.
This is a significant increase from 0.81 Billion in 2020.
What is Cryptocurrency Market Cap?
The cryptocurrency market cap is the total value of all cryptocurrencies in circulation. The market capitalization of cryptocurrency is calculated by multiplying the price of each unit by the total number of units in circulation. The total value of the global cryptocurrency market currently stands at over $1.4 trillion as more and more people turn to cryptocurrency investing.
After the token price, the market cap is the second most crucial measurement investors look at when evaluating a digital asset.
Most of this value is held in just a handful of currencies, with Bitcoin making up 58% of the total market cap, followed by Ethereum at 12% and XRP at 6%. Bitcoin Cash, Litecoin, and Tether round out the top 5, each holding 2-4% of the total market value.
Despite its large size, the cryptocurrency market is still relatively young and volatile.
Crypto continues to Swing but is a Lifeline for Many
The cryptocurrency market has been under severe pressure in 2022, mainly moving in lockstep with the tech-heavy Nasdaq, where the Federal Reserve started the process of Quantitative Tightening, which reduces liquidity in the stock market.
The price of Bitcoin, the largest cryptocurrency by market cap, is down more than 50% year to date. Still, it remains a lifeline to many, as Géraldine Monchau-Richard from Criptonite Asset Management explains: “In Lebanon, locals mine Bitcoin and buy groceries with the stablecoin Tether, as $1 is now worth 15 cents.”
As central banks struggle to contain hyperinflation, many people in emerging countries aren’t turning to crypto because they must; they do it because they have no other choice.
She says: “Lebanon has plunged into chaos as hyperinflation grips the country and banks force huge haircuts on dollar withdrawals.” and “Bitcoin is a convenient way to earn a living, bitcoin has also become a bank. People are putting their money in their phones. That is the easiest way. Ultimately, money is a human belief system.”
What does the Future hold?
The cryptocurrency market has been on a roller coaster ride over the past few months, with Bitcoin holding support at $20’000. Still, the outlook remains bleak as the consensus is that the Federal Reserve is in no rush to pivot its strategy of containing inflation, as was evident in the latest FOMC minutes delivered by Jerome Powell and that cryptocurrency prices will remain subdued throughout the year.
On the other hand, the global cryptocurrency market cap regained a vital level. With an ever-increasing crypto market cap, some investors will start calculating the long-term potential. Still, crypto has already become a daily way of life for many who feel that their government has let them down.
Rocco Strydom is the Founder of SGM Holdings – finance, energy and media and is the host of the
SGM podcast based in South Africa