For the first time since May, the total market capitalisation of cryptocurrencies has rebounded above USD 2 trillion, according to some exchanges and data trackers like CoinGecko. This is reflective of the strong interest and the plethora of regulatory and technological progress that the ecosystem has seen for this past year. This ranges from the likes of J.P. Morgan allowing wealth clients access to crypto funds on demand, to Mastercard overhauling its crypto card programme, to Allianz implementing blockchain in order to streamline international motor insurance claims.
With this latest rise in value, total cryptocurrency market capitalisation now once again exceeds the market capitalisation of corporate titan Amazon – but it has reached this position in a third of the time it took for Amazon to grow from a bookseller to today’s technology giant. Blockchain is making strides towards becoming a mature industry and its use cases are starting to have an impact on the way traditional industries operate.
With the current rebound in market value, the health of the digital asset ecosystem as a whole also shows strong signs of improvement. Bitcoin dominance of the overall asset class fell from around 71% in January to a current level of 43.4%. This diversification of asset allocations within the cryptocurrency space shows that other projects are receiving funding, from both retail and institutional sources.
While total market capitalisation and price changes are relevant to traders and attract much attention, in the long term it is the success of specific projects that pushes blockchain technology forward. Around this time last year, Amazon’s valuation was roughly 15 times that of cryptocurrencies, however advancements such as the latest Ethereum hard fork or Cardano’s work on smart contracts continued apace. Ultimately, value will be driven by real transaction volumes and utility in preference to a speculative belief in future potential.
This rapid growth in value is both a sign of the exponential growth of technology and a guide to the future trajectory and value of crypto assets in general, as they move from today’s still relatively small and largely cryptocurrency-driven market to a future in which they underpin all financial instruments and services.