Crypto market briefly surpassed $3 trillion mark after Bitcoin and Ethereum highs

Data from CryptoCompare shows that the price of Bitcoin hit a new all-time high last week, close to $69,000 but failed to breach the $70,000 barrier. BTC then endured a correction and is at press time trading at $65,700.

Ethereum’s Ether, the second-largest cryptocurrency by market capitalisation, hit a new all-time high last week, close to the $5,000 mark after making a new high. After ETH failed to breach the psychological barrier at $5,000, its price fell and is now at $4,700.

Both Bitcoin and Ethereum have been making headlines in the cryptocurrency space because of their new highs. Their price rises, coupled with several other alternative cryptocurrencies pumping thanks to retail investors’ bets, allowed the market to reach a $3 trillion market cap.

Notably, the cryptocurrency space surpassed the $2 trillion mark back in April, shortly after it hit $1 trillion for the first time in early January.

The cryptocurrency market may be rising over inflation fears recently bolstered by the US Bureau of Labor Statistics, revealing that the Consumer Price Index (CPI) was up 6.2% – its highest value in over 30 years.

The CPI is used to measure inflation in the US economy, which essentially leads to the decline of the purchase power of the US dollar. Bitcoin has been touted as a form of digital gold that can act as a hedge against inflation, so many investors are likely moving their funds into the crypto market, expecting the value of the dollar and other fiat currencies to drop.

Data shows that while retail investors have been betting on meme-inspired cryptocurrencies throughout the year, there has been a recent retreat back to Bitcoin and the original meme cryptocurrency Dogecoin. DOGE is notably supported by Tesla CEO Elon Musk, giving it a credibility boost.

The mayors of Jackson and Tampa also committed to converting their next paychecks into Bitcoin shortly after Miami Mayor Francis Suarez and NYC Mayor-elect Eric Adams announced they would be receiving their pay checks in BTC.

The city of Miami revealed it was looking to share some of the yield generated from the city’s new cryptocurrency – Miamicoin –  with its residents through the distribution of Bitcoin as a dividend. The city’s cryptocurrency was launched in August.

MiamiCoin was launched through CityCoins, an open-source protocol that allocates 30% of its reward to cities when their coins are bought or mined. So far, MiamiCoin has generated more than $21 million. Annualised, it’s seeing a return of around $80 million, which is one-fifth of the city’s annual tax revenue according to its mayor Francis Suarez.

Twitter sets up crypto team, and Mastercard launches crypto payment cards

Over the week, several high-profile companies also moved deeper into the cryptocurrency space. Twitter announced the launch of a dedicated cryptocurrency team in its latest push to embrace digital assets and decentralised applications. The new team will be led by Tess Rinearson and will “set the strategy for the future of crypto at (and on) Twitter”.

Rinearson is set to oversee and build on Twitter’s crypto-related efforts, which include a non-fungible token (NFT) authentication feature, and an initiative to explore decentralising social media.

Similarly, payments giant Mastercard has partnered with cryptocurrency and fintech platforms Amber Group, Bitkub, and CoinJar to launch cryptocurrency payment cards in Asia Pacific. The cards will convert cryptoassets into fiat currency at the time of sale and can be used anywhere Mastercard is accepted.

The initiative is part of the firm’s global crypto card program, which is looking to support cryptoassets as payment tools. The move could see Mastercard boost payments volume by tapping into cryptocurrency demand in the region, as the firm’s New Payment Index shows that 45% of consumers in Asia Pacific plan to use cryptos next year.

Coinbase reports $400 million in Q3 earnings

Nasdaq-listed cryptocurrency exchange Coinbase has reported earnings of $406 million in the third quarter of the year, a figure that represents a 500% increase over the third quarter of 2020, but a significant drop from its $1.6 billion income reported in Q2.

Coinbase CFO Alesia Haas noted that trading volume across the entire crypto spot market declined over Q3, hinting that the drop wasn’t specific to the exchange, which has been listing new tokens more often than before.

Over the week, cryptocurrency lender BlockFi filed a proposal for a spot Bitcoin exchange-traded fund (ETF) with the US Securities and Exchange Commission (SEC). The BlockFi NB Bitcoin ETF would trade on the New York Stock Exchange and hold Bitcoin directly.

BlockFi’s futures filings came after SEC Chair Gary Gensler hinted he’d be more likely to approve a futures-based Bitcoin ETF. Since then, multiple such products received a green light to trade, while BlockFi’s proposal is yet to move forward.

Francisco Memoria is a content creator at CryptoCompare who’s in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various cryptocurrencies.

Featured image via Unsplash.