Industry cheers as crypto market crosses crucial $1 trillion mark

Bitcoin value has notched up an impressive 37 percent jump this month, while Ethereum – the second largest crypto which follows the BTC trajectory, surged by 34 percent, taking the global crypto market cap to $1.02 trillion at the close of trading hours on Tuesday, as per data from CoinMarketCap, the most-referenced price-tracking website for crypto assets.

Crypto market is pumping again

Industry insiders said the sustained rally in the crypto market has started bringing much-needed cheer to the digital asset market.

The bitcoin value is expected to touch the $25,000 level in the coming weeks, though market players said the current rally may face some resistance before touching this level.

The total crypto market volume over the last 24 hours was to the tune of $56.97 billion, up by 1.19 percent from the previous day, the CoinMarketCap data showed.

Surprisingly, Solana (SOL) which was caught in the FTX fiasco, has also witnessed sharp correction and is now among the top 10 digital assets by market cap.

“The crypto market is having a delightful start to the year as it is back above the crucial $1 trillion mark,” Mahin Gupta, founder of Liminal, a leading digital wallet infrastructure platform with operations in the UAE, told Arabian Business.

“A prime reason for the current rally could be the growing market confidence following the digital asset industry’s move towards decentralisation and self-custody to create a safety net around user funds,” Gupta said.

On the prospects of the market making a major rebound in the coming weeks, Gupta said the US Fed meeting next month will be a crucial and closely watched event as it will set the course of monetary policies and the rate hike will be the central point of discussion.

“Fed has sent out feelers that it may end its hawkish stance but the outcome of the meeting will decide the market mood in the coming weeks,” he said.

Industry experts said the digital asset industry is currently witnessing a paradigm shift in the way retail and institutional users are storing their digital assets.

Investors – or users – have also been of late aggressively adopting self-custody storage solutions.

“After the recent events, single-point failure is the biggest concern of the digital asset industry and this can be effectively addressed through decentralisation and self-custody,” Gupta said.

Not everyone associated with the industry, however, buys the current optimism in the market.

“Although the crypto is pumping again, the fear of volatility still prevails and investors are more cautious than ever before despite the digital tokens have risen back to old level,” Shihab Makaniyil, founder and CEO of ShopDoc, a Dubai-based startup building a metaverse healthcare city, told Arabian Business.

“The market confidence is yet to be fully recovered after the spectacular collapse of FTX and other bankruptcies in the market have caused to wash away billions out of investors,” Makaniyil said.

Cynics in the industry also said the rally seems to be lacking fundamentals needed for a long-term sustainability and stability, as the fallouts due to bad players still continue to make ripples across the industry.

Makaniyil, however, said the current bounce-back assures the much-needed hope about the crypto industry.

“Crypto projects will come live again now,” he said.

Makaniyil also hinted at the possibility of his venture revisiting its proposed virtual currency issue plan.

“Due to uncertainty in the market, we had delayed the plans for issuing SD Coins for our web 3.0 project indefinitely,” he said.

The SD Coins issue is for ShopDoc’s healthcare city in Metaverse – akin to Dubai Healthcare City in virtual world – where the back-end was initially designed to be run on the blockchain with an NFT marketplace in it, allowing users to transact using cryptocurrencies.