The cryptocurrency market hit a historic high of $3.2 trillion in total value, driven by growing optimism following the election of Donald Trump as US president.
Investors are speculating that pro-crypto sentiments in Washington could lead to favorable regulatory policies for digital assets, according to CoinGecko data released on Wednesday.
This record valuation exceeds the previous peak from 2021, when market enthusiasm was boosted by pandemic stimulus measures and retail investor interest. However, unlike past surges, recent growth reflects broader interest from institutional investors who increasingly view cryptocurrencies as legitimate financial assets.
Bitcoin, the leading cryptocurrency, contributed heavily to the market’s value increase, reaching an all-time high of $93,480 before stabilizing around $89,874. Bitcoin’s rally aligns with Trump’s election and the anticipation of regulatory policies that could bolster the asset class. Investors saw a 30% jump in Bitcoin’s value since the election, while Ethereum, the second-largest cryptocurrency, rose by 33% to $3,220. Dogecoin, another notable token, surged by 140%, partly fueled by support from billionaire Elon Musk, a prominent Trump ally.
“Typically, Bitcoin leads the way, and we see altcoins follow as capital rotates,” said Matthew Dibb, chief investment officer at Astronaut Capital.
This trend is visible in the broader market rally, which has increased demand for cryptocurrency ETFs, a favored investment method among institutional investors wary of holding crypto directly.
Trump’s election, along with several pro-crypto lawmakers entering Congress, has added confidence among crypto investors who expect a regulatory environment more conducive to digital asset growth. This shift in sentiment has rekindled hopes that cryptocurrency could achieve mainstream adoption and more robust market integration.
“Bitcoin enthusiasts are known for bold predictions, but hitting $100,000 by year-end seems feasible,” said Carl Szantyr, founder of Blockstone Capital.
Technical indicators such as the Cryptocurrency Fear and Greed Index reflect this optimism, recently moving from “Greed” to “Extreme Greed” as Bitcoin’s Open Interest (OI) rose by 2.3% in 24 hours—a sign of growing speculative interest.
Although cryptocurrencies have made a remarkable recovery, some areas still show cautious investor behavior. For example, sales of non-fungible tokens (NFTs) have remained modest, averaging around $2,700, an increase from recent months but far below earlier highs.
DBS Bank’s digital exchange in Singapore reported a surge in trading but noted that clients are not yet exploring lesser-known or decentralized exchanges.
“We’ve not seen our clients shift assets towards more exotic platforms,” said David Hui, Chief Commercial Officer at DBS Digital Exchange.
Nevertheless, some industry players believe the rising market cap will stimulate interest in decentralized finance (DeFi) and blockchain applications.
“There’s growing interest in DeFi and tokenization of real-world assets,” noted Danny Chong, co-founder of asset-tracking platform Tranchess.
Chong predicted increased investment in blockchain-based payment solutions.
Despite the historic milestone, the cryptocurrency market remains small compared to traditional assets. The S&P 500, for instance, is valued at over $50 trillion, while the cumulative worth of mined gold sits at approximately $19 trillion. Cryptocurrency’s volatility and relative infancy continue to pose risks, even as it attracts both retail and institutional investors.
With rising inflation and expectations of Federal Reserve interest rate cuts, analysts believe that Bitcoin’s price trajectory could reach $100,000 by year’s end. Still, financial experts caution that high volatility may lead to price swings, a pattern that historically characterizes the crypto market’s path to major milestones.
