SINGAPORE, Nov 14 (Reuters) – The global cryptocurrency market has experienced a significant surge, with its total value exceeding $3 trillion. This renewed interest in crypto has been largely attributed to the recent U.S. presidential election and the anticipation of more favorable regulations under a potential Trump administration, which has spurred considerable optimism among investors.
Data from CoinGecko indicates that the aggregate market value of cryptocurrencies reached nearly $3.2 trillion early on November 14 in Asia, a value it has since maintained. This peak surpasses the highs of 2021 when speculative investments were inflated by pandemic-era stimulus, representing a remarkable recovery from the recent period of stalled growth.
Bitcoin, the dominant cryptocurrency, has reached record levels, coinciding with the market’s impressive performance. The price of Bitcoin recently hit a new all-time high of $93,480.
“Generally the way this market goes is bitcoin will break out and then the rest of the altcoins will follow,” explained Matthew Dibb, chief investment officer at Astronaut Capital, a cryptocurrency asset manager. “So there is that gradual rotation of capital…and then we can expect the total market cap to increase.”
The enthusiasm in the market stems from the expectation that Trump’s election, along with the election of several pro-crypto lawmakers to the U.S. Congress, will alleviate regulatory uncertainties. This shift could pave the way for a new era of growth in the digital asset space.
Bitcoin’s value has doubled this year. It has increased by 30% since the U.S. election on November 5, currently trading around $91,500. Smaller cryptocurrencies such as ether have also benefited and are up approximately 33% since Election Day, with ether trading at $3,220. Dogecoin, a popular token promoted by billionaire Elon Musk, has also seen substantial gains, rising by 140%.
Exchange-traded funds (ETFs) focused on cryptocurrencies have also witnessed increased demand, potentially indicating interest from financial institutions, which typically have been hesitant to directly hold cryptocurrencies. Since November 6, spot Bitcoin ETFs have seen net inflows of roughly $4.05 billion, representing about 15% of the total inflows since the launch of these ETFs in January, according to Refinitiv Lipper data.
David Glass, a digital assets strategist at Citi, noted that, “People wanted more exposure to crypto, clearly, from the Trump presidency and they wanted more risky asset exposure in general. From the crypto front, there’s the story of removing regulatory headwinds, and the potential strategic bitcoin reserve.”
Trump has hinted at the creation of a U.S. “strategic bitcoin reserve”, similar to the nation’s gold reserves, although specific details remain vague. This announcement has further fueled investor confidence.
Carl Szantyr, founder and managing partner at Blockstone Capital, expressed optimism about the near future, stating, “Bitcoin enthusiasts are known for bold predictions, but hitting $100,000 by year-end seems feasible.”
Market Context and Comparisons
The current rally evokes memories of the volatile “boom-bust” cycle that began with Bitcoin trading below $20,000 at the beginning of last year, a period known as the “crypto winter,” following the collapse of FTX and other crypto ventures.
Despite the recent gains, it is important to recognize the relative size of the cryptocurrency market compared to traditional assets. For context, the value of the 209,000 tons of gold mined throughout history, as estimated by the World Gold Council, is nearly $19 trillion. The market capitalization of the S&P 500 index is a staggering $50.6 trillion.
Cautious Notes and Future Outlook
While there is widespread optimism, some segments of the crypto ecosystem are not showing signs of recovery. Average sales prices for non-fungible tokens (NFTs) have only marginally increased since May, according to NonFungible.com.
In Singapore, DBS Bank, which operates a digital exchange, reported that although trading volume has surged, with over one-third of last year’s total volume executed in the first ten days of November, investors are not yet actively engaging in the more obscure areas of the market. DBS Digital Exchange’s chief commercial officer, David Hui, stated that, “We’ve not seen our clients shift their assets towards more exotic platforms or decentralised exchanges.”
Despite reservations, industry experts remain positive. Danny Chong, co-founder of Tranchess, a decentralized asset tracking platform, said, “There’s increased interest and willingness to look at DeFi and other possibilities associated with blockchain. The heightened market capitalisation, which if sustained for a longer period, would likely also invite deeper interest into new and existing themes,” referring to tokenization of real-world assets and payment services.
