Crypto Market Joins the Trillion Dollar Club Thanks to Bitcoin’s Stunning Rally

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Cryptocurrencies Pass $1 Trillion Valuation as Institutions Amass Bitcoin

Cryptocurrencies passed the trillion-dollar mark for the first time yesterday, thanks to Bitcoin’s blistering run.

Coinmarketcap.com showed the crypto market’s total valuation climbing into 13 digits at about at 5:25 p.m. ET. That’s up about 31 percent since the end of 2020. Bitcoin accounted for almost two-thirds of the increase.

The leap compares with a fractional decline in the S&P 500 so far this year. It also pushes the crypto market into small club with Apple (AAPL), Microsoft (MSFT), Amazon.com (AMZN) and Alphabet (GOOGL), which are also worth more than $1 trillion. Still, cryptos remain about one-tenth the size of the $10 trillion gold market.

Bitcoin’s valuation stood at $695 billion last night. That makes it comparable with Tesla (TSLA).

Institutional Adoption for Bitcoin

The rally follows a steady drum beat of institutional adoption as mainstream firms build positions. Bill Miller was the latest to jump on the bandwagon this week. The legendary value investor declared in his quarterly letter that if “more companies decide to diversify some small portion of their cash balances into bitcoin instead of cash, then the current relative trickle into bitcoin would become a torrent.”

There have also been two other headlines telling a similar story:

  • Coindesk reported on Monday that over 37,000 Bitcoins were into cold wallets at the start of 2021, a potential sign of institutions amassing large positions.
  • Cointelegraph reported on Tuesday that retail investors, especially in Asia, are not driving the current rally in Bitcoin (unlike in 2017). This time it’s mostly dollar-based institutions, according to the report.

There’s one last difference this time around versus before: the U.S. dollar.

Bitcoin launched in January 2009, around the same time the greenback bottomed. That means the entire rally of 2011-2018 happened against the backdrop of a strong dollar. But now the dollar is crumbling, which could make Bitcoin even more attractive as a store of value.

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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.