Bitcoin Accounts for 70% of Cryptocurrency Market Share
Bubble Concerns Persist Amid Continued Upward Trend
[Asia Economy Reporter Jeong Hyunjin] The value of the cryptocurrency market has surpassed $1 trillion (approximately 1,092 trillion KRW) for the first time in history. Following the "Blue Wave" (the U.S. White House and both houses of Congress being controlled by the Democratic Party), expectations for increased liquidity have grown, attracting funds to Bitcoin, which has surpassed the $40,000 mark. As the cryptocurrency market rapidly expands, it is being recognized as moving one step closer to mainstream financial markets.
According to CNBC and others on the 7th (local time), based on data from cryptocurrency information provider CoinMarketCap, the total value of the cryptocurrency market reached $1.0424 trillion on that day, marking the first time it exceeded $1 trillion. Bitcoin holds the largest share, forming a market worth over $700 billion, which is 69% of the total, followed by Ethereum at 13%. These two cryptocurrencies account for more than 80% of the entire market.
Bitcoin rose more than 10% that day, breaking through the $40,000 mark for the first time. Bitcoin’s price has surged 38% in just one week this year, continuing its rapid rise following last year. It doubled in less than a month after surpassing $20,000 on January 16. Chamath Palihapitiya, founder of Social Capital, told CNBC, "It will probably reach $100,000, $150,000, or $200,000. The timeframe might be around 5 to 10 years, but it will get there eventually."
Some express concerns that Bitcoin’s price may soon undergo a correction. Alex Mashinsky, founder of blockchain financial service company Celsius Network, predicted a correction soon, with prices possibly dropping to between $16,000 and $20,000 in the first quarter. Although the high volatility of cryptocurrencies makes it difficult to consider them mainstream assets and concerns about a bubble due to recent rapid price increases persist, foreign media report that interest in cryptocurrencies is pouring in, especially from institutional investors, so the upward trend is expected to continue for the time being.
Bitcoin advocates describe cryptocurrencies as a kind of "digital gold," explaining that they are a safe asset and a hedge against inflation. Especially with government stimulus measures initiated due to the COVID-19 pandemic expected to cause rapid inflation, cryptocurrencies are argued to be an alternative asset. Simmons Chen, head of cryptocurrency investment and trading at Babel Finance, said, "The January rally is attracting asset managers who are interested in diversifying their portfolios by seeking alternative investments like cryptocurrencies or gold to reduce inflation or geopolitical risks."
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