Booming Bitcoin Helps Crypto Market Cross $2 Trillion Mark

As the dreary first quarter draws to a close, cryptocurrency appears to have a wind in its sails. It has crossed the $2 trillion mark and proven surprisingly resilient amid global chaos.

At Monday’s high of $47,765, the market leader Bitcoin broke through the narrow range of $34,000 to $44,000 that had been trading for most of 2022. By rising from a low of just over $40,000 on March 21, it Gained 18 per cent.

Its relative stability contrasts, at least against past performance, with stock markets, traditional currencies and even safe-haven gold, which have been shaken by Russia’s invasion of Ukraine as well as Fed tightening.

Bitcoin’s cruelty has faded lately. Its 30-day volatility is around 4 percent, about two-thirds of the level it was in June 2021, according to futures trading platform Coinglass. The highest level this year was 4.56% on March 16.

This measures its deviation from its own record levels, and bitcoin continues to experience extreme volatility, such as a 17 percent jump on March 1. But it’s more manipulative than it was in 2021 when it could move up to 40 percent a day.

By comparison, the high-tech Nasdaq was down 5-6 percent on several days in 2022 and was down 20 percent for the year as of March 14, before stepping in to trim half that loss.

“The biggest conflict we have seen in Europe since World War II has shaken global markets,” said Piers Crosby, general manager of charting platform TradingView in New York.

“What we’ve seen across other major assets is huge ramifications – from US stock markets as well as global markets,” he added. “Bitcoin has stayed somewhat in a very narrow range…but actually, in terms of relative strength, it is very bullish.”

The total value of the cryptocurrency market soared above $2 trillion on Friday, according to analytics platform CoinMarketCap. To put that in context, the market briefly hit $3 trillion on November 10, when Bitcoin reached $69,000.

The winding rise again above $2 trillion was slow and was also helped by the proliferation of coins and tokens – CoinMarketCap’s count rose by nearly 5,000 since November to stand at 18,511 cryptocurrencies. Bitcoin’s market cap has reached $902 billion, but it still has a long way to go to get back the $1 trillion it earned in November. While it remains the dominant cryptocurrency, its market share has also gradually decreased from as much as 70 percent of total capitalization in early 2021 to 42 percent now.

Many cryptocurrency investors believe they can tell the direction of bitcoin before the sprawling volatile cryptocurrency leaves them in the financial dust.

“Although bitcoin remains strong in the short term, higher oil prices are raising the possibility of a recession over the next year or so,” said Marcus Sotirio, an analyst at UK-based digital asset broker GlobalBlock.

“Oil is up about 25 percent in the past six days alone, and bitcoin bulls will want to see this tail for continued strength.”

(This story has not been edited by Business Standard employees and is automatically generated from a shared feed.)

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