The experts named the factors due to which in the next few months the valuation of the digital asset market could grow to $ 4 trillion and explained how the increase in this indicator affects the industry.
On the morning of November 8, the market valuation of cryptocurrencies surpassed $ 3 trillion for the first time, according to CoinGecko. This happened after the rise in the price of bitcoin to $ 66 thousand and the renewal of the historical maximum of Ethereum above $ 4.78 thousand. Topplabs.org experts explained why reaching a capitalization of $ 3 trillion is an important event for the digital assets industry.
Liquidity is important for whales
The level of $ 3 trillion for the capitalization of the crypto market is an important mark, especially for large investors, said Viktor Pershikov, lead analyst at 8848 Invest. In his opinion, the “whales” are important for liquidity, market depth and safe storage of digital assets.
“Market capitalization above $ 2 trillion made it possible for big names from the classical stock market to enter cryptocurrency, and classical banks began to offer crypto products,” the analyst explained.
With the growth of capitalization, the confidence of participants in the industry also increases, the risks of rapid price falls, which are inherent in low-capitalized assets and sectors, decrease, Pershikov explained.
If the current rates and dynamics of growth of the industry continue, then within the next 2-3 months the capitalization of the crypto market could reach $ 4 trillion, predicted Mikhail Karkhalev, financial analyst at the Currency.com crypto exchange. In his opinion, it is worth taking into account not only the possible rise in the price of bitcoin, but also the dynamic development of the sphere of decentralized finance (DeFi). New promising projects can easily push existing projects out of the top 10 most capitalized cryptocurrencies, the analyst explained.
On the horizon of several years, the capitalization of the digital asset market will increase to $ 7-9 trillion, Pershikov is sure. He argues that the main drivers of growth will be the arrival of new institutional players and inflation in fiat currencies, which will only intensify.
“Taking into account current trends, next year capitalization may rise to $ 4 trillion amid additional capitalization of two sectors: DEX tokens and DeFi projects,” the analyst said.
What else to pay attention to
It is important to take into account not only the general level of cryptocurrency market capitalization, but also its structure, warned Anton Kravchenko, CEO of Xena Financial Systems. He advised to pay attention to the fact that the share of bitcoin in the market is declining, while other projects are growing rapidly. At the moment, BTC dominance is 43%, although in the second half of October it was at 48%, according to Coinmarketcap.
“Hundreds of millions of dollars have been invested in product development for Solana, Algorand, Fantom, new ecosystems are developing,” said Kravchenko.