The market capitalization of cryptocurrencies has surpassed $2 trillion for the first time, as ethereum reaches new highs.
On Monday, the cryptocurrency market’s valuation exceeded $2 trillion for the first time, owing to a rise in ether, the second-largest digital coin.
According to price-tracking website CoinGecko, the market capitalization of the cryptocurrency market has doubled in just over two months, as retail and institutional investors pile into the room.
Bitcoin, the most common digital currency, holds more than half of the overall cryptocurrency market capitalization. This year alone, Bitcoin has risen over 100%, continuing to accelerate the cryptocurrency price higher.
Bitcoin touched a new record of over $61,000 last month. According to Coindesk numbers, the digital coin was trading at around $58,800 on Tuesday.
However, it seems that ether, the decentralized coin that drives the Ethereum blockchain, is to blame for the recent surge in the cryptocurrency sector.
Bitcoin is also based on blockchain technology, which is a decentralized database of operations and a medium for cryptocurrency transactions to take place. The Ethereum blockchain, on the other hand, is more of a digital framework that allows developers to create applications on top of it. These applications can then be purchased with ether.
Ethereum’s so-called smart contracts are a core feature. There are contracts that can be performed remotely with the help of software.
The use of Ethereum in so-called decentralized finance, or Defi, applications are gaining popularity. There are financial services focused on the blockchain, such as banking, that may potentially circumvent banks and brokerages. Cryptocurrency can be used by users of these applications to make purchases.
Ethereum is also at the heart of the latest craze for non-fungible tokens, or NFTs, a new form of digital commodity.
Mark Cuban, a billionaire businessman, controls ether and says it is the “closest thing we have to a real currency.”
According to CoinDesk, Ether reached an all-time high of $2,151.25 on Tuesday morning Singapore time. Year-to-date, it has increased by more than 180 percent.
Companies are still expressing interest in the digital currency. Last month, Chinese software manufacturer Meitu purchased $22.1 million in ether, making it one of the first large corporations to do so.