Crypto market inches closer to a $2 trillion market cap with each rally. The total market cap had crashed following its peak back in May when the entire market saw a crash across prices. Since then, the movement of the market cap has wavered between slight recoveries and dips. The total crypto market cap had crashed to as low as $1.2 trillion at some point in June.
The market cap has now resumed its upward climb, seeing the price of top coins post tremendous gains in the market. Getting back up to $2 trillion remains a big point for the market in general. The total crypto market cap has gained over $500 billion in the past three weeks. Culminating in the present market cap value of over $1.8 trillion.
Price Surge Following $2 Trillion Market Cap
A price surge is sure to follow the crypto market hitting a $2 trillion market cap. The last time the total market cap hit $2 trillion saw the price of bitcoin pass $60K. With Ethereum shooting past $4,000.
Total market cap nears $2 trillion mark | Source: Crypto Total Market Cap from TradingView.com
Market cap numbers are calculated by multiplying the current circulating supply of an asset with the current price of that asset. The total crypto market cap is then gotten by adding up all of the market caps of the active cryptocurrencies in the market. This means that the higher the price of an asset goes, the higher the market cap of that asset.
By extension, this leads to an increase in the total market cap. As coins continue to see increasing prices, the total market cap is going to continue to grow, which, so far, has continued a steady climb towards $2 trillion.
Crypto Getting More Valuable
As inflation rages through countries and wages, interest rates not going up to keep up with the inflation rate, individuals and institutions will continue to look for alternatives that will provide an adequate hedge against growing inflation. Investors have now turned their attention to crypto.
Coins like bitcoin have a deflationary nature which means that they are designed to become more scarce over time. With only 21 million coins programmed to ever go into circulation, bitcoin provides the perfect hedge against inflation. This has sent investors running into the crypto market to own a piece of an asset that will appreciate at a rate faster than the inflation rate.
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The new EIP-1559 release that sees ETH fees being burned instead of being rewarded to miners also puts Ethereum on a track to become deflationary. This has triggered renewed interest in ETH as one of the cryptocurrencies with the potential to help hedge against inflation over time.
Indicators continue to show that the total market cap will continue to rally 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