Over the past 3 months, the crypto market has grown by over $1 trillion in market capitalisation.
Bringing the market cap of all cryptocurrencies to more than $ 2 trillion according to data from crypto CoinGecko.
In this post, I will be sharing with you the various factors responsible for this exponential growth of the crypto market.
And how you can structure and manage your portfolio to maximise the ongoing bull run.
Factors responsible for the 2021 crypto market boom
Increased institutional interest
Increased regulatory clarity
Increased positive media coverage, mass adoption.
Let's take a closer look into each of the above factors and how they affect the current crypto market growth.
1. Increased institutional interest in crypto
Institutions have been showing interest in crypto since 2020 and some have been studying it long before now but many of them only began putting money into Bitcoin in 2021.
Micro Strategy was the first public company to publicly declare its investment in Bitcoin back in August 2020 when it bought its first 21,454 Bitcoin (BCT) at an average price of $11653.
Since then, over 20 "known" public companies have invested in Bitcoin and the total institutional investment in the coin now stands 178,283.4 BTC worth $10,296,041,128 at the current price of $57,867.17 according to data from CoinGecko.
As these companies invest more and others, both know and unknown begin to put their company reserves and funds into Bitcoin and other cryptocurrencies, the crypto market is expected to only keep growing.
Your job is to accumulate as much as you can before the institutions fully come, then watch them pump your bags to the heavens. Good luck.
2. Increased regulatory clarity
Institutions are only able to participate in crypto because the law and governments have given them the green light.
Thanks to the increasing regulatory clarity on the status of Bitcoin and cryptocurrencies as an asset class.
Now companies can put their excess capital into Bitcoin (BTC) as a reserve asset and a hedge against the impending fiat inflation, caused by endless money printing and reckless monetary policies of lazy and clueless governments.
Though we cannot say that the laws are clear on cryptocurrency yet, but we have made significant progress in terms of regularity clarity since the 2017 bull run, through the 2018/2019 crypto winter.
Governments have come to realise that they can't just do away with crypto and thus are forced to accept its place in the new world and can only regulate it.
The more the law is clear about crypto, the more institutions can invest in it and the more the market will continue to grow with new cash inflows.
Your job is to position yourself accordingly continue being your own bank.
And avoid centralized platforms wherever possible if you want to keep what's left of your financial privacy and freedom.
3. NFT Hype
If 2020 was the year DeFi took off, 2021 is the year NFTs found their voice and place in crypto. And I think the party has only just begun.
NFT stands for non-fungible tokens. A blockchain representation or version of a physical or digital piece of art.
And just like every artwork, their price is determined by their perceived value and reputation of the creator rather than any intrinsic worth.
People are creating and minting NFTs and making hundreds, thousands, and some even millions from them.
With a single piece of NFT going for as high as $69,346,251 people have realised there's money to be made from blockchain-based digital art, and everyone wants a piece of the pie.
The NFT market is currently worth $27,774,775,650 ($27.8 billion). About 1.4% of the entire crypto market capitalisation. And it's expected to continue growing as more people get involved in crypto and catches the fever.
I am yet to begin my journey into the world of NFT and will soon begin creating and listing some creative stuff in the various NFT markets. Look out for them and make sure you get yourself some if you like them.
Ask any average joe on the street if they have ever heard about crypto and they will tell you no.
Ask them, if they have heard about Bitcoin, and my guess is the majority will change their no to a yes.
Bitcoin being the first successful cryptocurrency is the king of crypto and it is the only coin the mainstream media talks about most of the time. Though that is changing as the crypto market matures.
The current bull run, like every other bull run crypto, has witnessed is spearheaded by Bitcoin.
When Bitcoin broke its all-time high (ATH) of $20,000 in January, it ushered in a new wave of optimism as bulls aim for new ATH.
And coupled with the aforementioned factors all playing out at the same time, things started to get more exciting.
With a market dominance of 54.0%, Bitcoin will continue to determine the direction of the entire market in the short to medium term.
5. Increased positive media coverage, mass adoption.
Gone are the days of monthly Bitcoin obituaries.
What we hear now is how Bitcoin is a hedge against inflation. News of the latest public company inventing in Bitcoin, increasing regulatory clarity, and how Bitcoin price and crypto adoption is rising fast.
In fact, you can bet your coins that most mainstream media houses are already invested in crypto.
Journalists have even started aping into NFTs as an entire column on the New York Times newspaper has been tokenized as an NFT and is up for bidding. You can find the story here.
So from calling crypto scams, dead, illegal, to not just buying Bitcoin but tokenizing a mainstream news page. Crypto has come a long way and the journey has only just begun.
The current crypto bull run is being fueled by increased institutional interest and investment, positive media coverage and participation in crypto, greater regulatory clarity among others.
Even with a $2 trillion market cap, the value of the crypto market is still relatively insignificant compared to fiat.
Gold alone has a market cap of over $10 trillion. And there's over $80 trillion in fiat with more being printed daily since 2020.
That should show you that there's still a lot more money that's going to be flowing into crypto as people discover how fucked up they are with fiat and looks for ways to preserve and possibly grow their wealth.