Cryptocurrency market cap exceeds $ 2 trillion for the first time

GUANGZHOU, China – The cryptocurrency market value surpassed $ 2 trillion for the first time on Monday, due to a rally in Ether, the second largest digital coin.

In just over two months, the market capitalization of the cryptocurrency market has doubled, according to price tracking website CoinGecko, as retail and institutional investors crowd the space.

Bitcoin, the largest digital currency, accounts for over 50% of the total cryptocurrency market capitalization. Bitcoin has grown over 100% this year alone, which has helped drive the cryptocurrency market higher.

Bitcoin hit a record high of over $ 61,000 last month. The digital coin was trading at around $ 58,800 on Tuesday, according to data from Coindesk.

But the latest push in the cryptocurrency market appears to have been driven by Ether, the digital coin that powers the Ethereum blockchain.

Bitcoin also works on a technology called blockchain which is a public ledger of activity and a means for transactions to take place using cryptocurrency. In comparison, the Ethereum blockchain is more like a software platform that allows developers to build applications on it. Users can then spend Ether on these apps.

So-called smart contracts are a key feature of Ethereum. These are contracts that can be executed automatically using code.

There is growing enthusiasm for the use of Ethereum in so-called decentralized finance, or DeFi, applications. These are blockchain-based financial services, such as loans, which could in theory bypass banks and brokerage houses. Users of these apps can make transactions using cryptocurrency.

Ethereum also has the underlying technology behind the recent craze for non-fungible tokens, or NFTs – a new type of digital asset.

Bitcoin is still the driving force behind the cryptocurrency market and in recent months the interest of companies and large institutional investors has increased sharply.

Tesla and Square are among a handful of companies that have bought bitcoin.

Meanwhile, major investment banks are exploring ways to empower clients to get involved in digital asset investments. In March, CNBC reported that Morgan Stanley became the first major U.S. bank to offer its wealth management clients access to Bitcoin funds. CNBC also announced last month that Goldman Sachs is preparing to launch its first investment vehicles for bitcoin and other digital assets to clients of its private wealth management group.

Investors are also hoping for an expanding portfolio of investment products and many are looking at Grayscale Investments, which operates one of the largest publicly traded bitcoin funds. It is known as the Grayscale Bitcoin Trust.

The company said Monday it was “100% committed” to converting that trust into an exchange-traded fund, or ETF. This would effectively track the price of bitcoin and allow traders to play the price movement without owning the cryptocurrency itself. This could be a way for more investors to get involved in the bitcoin market.