Though the price of bitcoin has fallen over the past week, the cryptocurrency market is still soaring to new highs as investors plow into a booming crop of altcoins—or bitcoin—alternatives, minting massive gains and echoing the cryptomania that led to a massive 80% market correction less than four years ago.
The cryptocurrency market hit a record-high market capitalization right above $2.5 trillion just before midnight Monday, reflecting more than $200 billion in added value over the past week despite bitcoin, which commands 44% of the market, falling nearly 1% over the same period.
By market value, the biggest cryptocurrency gainer by far is ether, the world’s second-largest cryptocurrency, which has soared nearly 32% and added about $115 billion in market value since last Monday.
On Friday, JPMorgan attributed Ethereum’s “striking” rise to growing interest from institutions and at-home traders, citing developments like the world’s first ether exchange-traded fund debuting in Canada, the popularity of nonfungible tokens using Ethereum and the European Union’s lending arm issuing its first-ever digital bond (of $120 million) on the Ethereum blockchain.
Percentage-wise, the biggest gainer among the world’s ten largest cryptocurrencies is bitcoin cash, a bitcoin spinoff that launched in 2017 and now boasts cheaper transaction fees than the world’s largest cryptocurrency; it’s up a staggering 41% over the past week, giving it a $26 billion market cap and making it the ninth most valuable token.
Following closely behind, litecoin, an older token developed in 2011, has soared nearly 38%, eclipsing its cryptobubble peak in 2017 and hitting an all-time high above $400.
Other top tokens posting stunning gains this week include Cardano’s token, ada, a four-year-old cryptocurrency that’s climbed 26%, and dogecoin, which is still up 24% despite crashing as much as 45% early Sunday after self-proclaimed “Dogefather” Elon Musk called it a “hustle” in his Saturday Night Live debut.
“[The market] carries some echoes of the froth that was evident in December 2017, when the share of bitcoin had fallen from around 55% to below 35%,” JPMorgan’s Nikolaos Panigirtzoglou said Friday, adding that bitcoin’s market share has plummeted from 60% to 44% over the past month alone.
Five of the world’s ten largest cryptocurrencies hit new record highs over the past week, including ether early Monday morning. Over the past year, the crypto market has skyrocketed in value about 920%.
The price of bitcoin climbed fifteenfold in 2017 amid a flood of mainstream adoption, as pioneering platforms like brokerage Coinbase made buying and selling cryptocurrencies easier. However, that bubble popped after countries like South Korea and China started cracking down on the crypto industry, sparking a selloff that crashed bitcoin prices by nearly 80% in less than one year. During the pandemic, heightened inflationary concerns and booming institutional adoptions have minted similarly stunning gains, though many experts seem convinced the industry’s promising technology will keep prices afloat this time around. Just last week, Goldman Sachs unveiled a new cryptocurrency trading operation.
What To Watch For
Regulation. Last week, new Securities and Exchange Commission Chair Gary Gensler suggested that the agency may be gearing up for a long-awaited crypto crackdown, telling CNBC: “To the extent that something is a security, the SEC has a lot of authority, and a lot of crypto tokens—I won’t call them ‘cryptocurrencies’ for this moment—are indeed securities.”