Cryptocurrency market surges to $2 trn

Mumbai: Of late, cryptocurrency market cap has surged to $2 trillion. The increased market cap can be attributed to the spiralling demand of bitcoin as an investment as well as its acceptance as a payment method. The growth in demand from retail investors and institutions like Tesla, BNY Mellon has definitely put a spotlight on cryptocurriences.

Witnessing the strong momentum in the past year, it wasn't surprising to have achieved this milestone. Along with a surge in retail investment crypto industry has also witnessed robust growth in institutional investors and mainstream companies' participation. One of the prime examples of large institutional investment is latest bitcoin purchase of $15 million by microstrategy. Enthused by this development, investors in the virtual currency are now eying other such currencies too so as to put their money where the mouth was.

The increase in the market cap of cryptocurrency is majorly led by bitcoin, which had crossed $1 trillion in market cap in the last week of February. Ethereum too has risen 190 per cent since January this year. "To not lose out on the digital asset, Bitex recommends a SIP approach to retail investors to build their investments periodically and also average out steep highs and lows owing to volatility," says Monark Modi, founder & CEO, Bitex. Cryptocurrency as an asset class has always managed to outperform the traditional asset class massively and grow even in these uncertain conditions. Experts are of the view that more cryptocurrencies may be developed in days to come.

Sumit Gupta, cofounder & CEO, CoinDCX, said: "We have noticed that investors are heavily looking at other cryptocurrencies and moving beyond bitcoin and ethereum. It is indeed a decisive vote of confidence on the entire cryptocurrency asset class."

"We will witness many new products being developed around blockchain and cryptocurrency as the industry continues to evolve. The cryptocurrency segment is seen as a robust alternate asset class for the new age investors," he added.

Citing the reason behind the gaining popularity by other virtual currencies, Vikram Rangala, CMO, ZebPay says that probably the biggest factor is the growing NFT market, which is largely powered by ethereum. Ethereum has hit new all-time highs.

NFTs are getting a lot of mainstream attention and it's only the beginning.

ZebPay launched its Zebra NFT project last December to bring this marketplace to India. NFTs aren't just for digital art and collectibles, they can store all forms of intellectual property and agreements, giving them huge potential. A lot of the other currencies are also associated with larger use cases, like decentralized finance, which has the potential to bring a lot of financial inclusion and opportunity. In short, the valuation is based on real value. These are use cases that go far beyond price speculation, Rangala said.

The prices of cryptocurrencies have increased significantly and with many well-known corporations trying to hold bitcoin on their balance sheets, the attention increase has gone through the roof. A lot of people who are signing up nowadays are the ones who were on the fence for more than a year. This is bringing in new money into the system and it is in terms of 3x as compared to the last quarter of 2020.

Unocoin is witnessing a good balance of professionals and businessmen when it comes to mid-size investments and generally the enthusiastic millennials when it comes to smaller cheque size investments. The new joiners nowadays are in the age range of 25-40 years whereas the men to women ratio have continued to be the same for many years that stands at 85:15. Though the numbers on both have gone up and have doubled since the last quarter.

Sathvik Vishwanath CEO & Co-Founder of Unocoin says, "We have seen at least 2x jump in the number of users in the Q1 of 2021 as compared to the last quarter of 2020. Our platform is well known for being friendly for new-comers and investors than pure speculators and traders.

Our focus has continued to be the same. The new money flowing in is fuelling the entire crypto industry worldwide and the interests among millennials are at an all-time high. Many are realising that it is easy to sell bitcoin at these all-time high prices but would be very tough to buy them back in the future"