In 2021, Bitcoin and Ethereum have seen a huge rebound. In April 2021, the value of the cryptocurrency market exceeded US$2 trillion for the first time.
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Guangzhou, China-On Monday, the value of the cryptocurrency market exceeded US$2 trillion for the first time due to the rise of the second largest digital coin, Ether.
Price tracking website CoinGecko said that in just over two months, with the influx of retail and institutional investors, the market value of the cryptocurrency market has doubled.
Bitcoin, the largest digital currency, accounts for more than 50% of the entire cryptocurrency market value. This year alone, Bitcoin has risen by more than 1
Last month, Bitcoin hit an all-time high of more than $61,000. According to Coindesk data, the trading price of the digital coin on Tuesday was approximately $58,800.
However, the latest growth in the cryptocurrency market seems to be driven by Ethereum, which is the digital coin that powers the Ethereum blockchain.
Bitcoin also runs on a technology called blockchain, which is a public ledger of activities and a way of using cryptocurrency for transactions. In contrast, the Ethereum blockchain is more like a software platform that allows developers to build applications on top of it. Then, users can spend ether on these applications.
The so-called smart contract is the main function of Ethereum. These are contracts that can be executed automatically using code.
The use of Ethereum in so-called decentralized finance (DeFi) applications is becoming more and more exciting. These are blockchain-based financial services, such as loans, which can theoretically bypass banks and brokers. Users of these applications can use cryptocurrency for transactions.
Ethereum also possesses the underlying technology behind the recent non-fungible token (NFT) (a new type of digital asset) boom.
Bitcoin is still a powerful force in the cryptocurrency market, and the interest of companies and large institutional investors has greatly increased in the past few months.
Tesla and Square are one of the few companies that buy Bitcoin.
At the same time, large investment banks are exploring ways to allow customers to participate in digital asset investments. In March, CNBC reported that Morgan Stanley became the first large bank in the United States to provide access to Bitcoin funds to its wealth management clients. CNBC also reported last month that Goldman Sachs is preparing to launch the first investment tool for Bitcoin and other digital assets to clients of its private wealth management group.
There is also hope among investors to expand their investment portfolio, and many people are paying attention to Grayscale Investments, which is one of the largest publicly traded Bitcoin funds. It is called Grayscale Bitcoin Trust.
The company said on Monday that it was “100% committed” to converting the trust into an exchange traded fund or ETF. This will effectively track the price of Bitcoin and allow traders to make price movements without owning the cryptocurrency itself. This may be a way to get more investors to participate in the Bitcoin market.