Despite the recent slump, the cryptocurrency market has reclaimed its trillion-dollar status, driven by strong rebound in the majority of the digital coins even though the macro environment continues to be uncertain. The total market capitalisation of the global cryptocurrencies crossed the $1 trillion mark in the past 24 hours, tracking a positive rally in the traditional markets on expectations of a less aggressive policy stance by the Federal Reserve in its meeting later this month. Bitcoin, the world’s largest crypto, also gained momentum and breached $23,000 level for the first time in a month, while Ether tested the $1600 level briefly on Tuesday owing to a merger announcement which could make Ethereum completely carbon neutral as it will move towards a proof of stake system.
According to Tarusha Mittal, COO, and Cofounder, UniFarm, the overall crypto market cap is holding strong above the psychological barrier of $1 trillion, but it would be too early to celebrate a bull run as high inflation and geopolitical uncertainty are keeping the investors on their toes. “The European central banks are also planning a rake hike which may have a significant impact on the overall crypto market,” he adds.
“The crypto market was hovering just below the $1 trillion mark for quite some time but the latest mini rally in Bitcoin and Ether prices has pushed the crypto market cap beyond the crucial $1 trillion mark. Bitcoin and Ether have witnessed double-digit growth in the past seven days and they jointly contribute roughly around $700 billion to the overall crypto market cap. It is difficult to predict a bull run as of now because the macroeconomic factors surrounding the crypto market remain shaky,” says Shivam Thakral, CEO of BuyUcoin.
The crypto market has witnessed sharp selling in the recent few months, in sync with the global equity market, as record surge in U.S. consumer inflation raised concerns about aggressive rate hike by the Federal Reserve which could lead to a recession. There is speculation in the market that the U.S. central bank may raise interest rates by 100 basis points (bps) later this month, after a 0.75% hike in the previous meeting.
At the time of reporting, Bitcoin was trading at $23,526, up 7.5% in the past 24-hour trade. It touched an intraday high and low of $23,839.5 and $21,829, respectively. The world’s most popular digital coin traded 66% lower than its all-time high of $68,789.63 touched in November last year. It has jumped 18.5% in the last seven days and 14% in the past one month.
Other popular digital currencies also saw a bullish trend in the past 24 hours of trade. Ethereum, the world's second-biggest crypto, gained 1.2% to $1,547, while Binance Coin, Cordano, and XRP added 2.6%, 9.5%, and 4.7%, respectively. The famous meme coins like Dogecoin and Shiba Inu were also in upbeat mood, surging in the range of 9-11%.
A similar pattern was seen in global equities, with markets in Asia, Europe, and the U.S. witnessing solid buying on Wednesday. Indian equity benchmarks, the BSE Sensex and the NSE Nifty, gained more than 1% amid broad-based rally, following firm cues from global peers.