Bitcoin Market Cap Could Be US$2 Trillion! This is the Sign

 Cryptocurrencies have made a tremendous comeback after the prolonged crypto winter that started in 2018. This is known from the rapidly growing market cap of Bitcoin and other crypto assets.

With the banking crisis that suddenly hit the US and Europe this year, bitcoin, ethereum and other cryptocurrencies have been revived, with the price of bitcoin climbing back up to $30,000.

After the previous month of turmoil, ethereum was also on the rise following an explosion of institutional activity.

Current stress in the traditional banking sector has cemented bitcoin's argument as a "decentralized, untrustworthy, scarce digital asset," according to Standard Chartered's head of digital asset research, Geoff Kendrick, quoted by Forbes .

Kendrick's bullish prediction for Bitcoin's market cap of US$2 trillion, along with its potential to reach US$100,000 by the end of 2024, suggests a return to interest in the cryptocurrency.

The Banking Crisis as a Trigger for the Rise of Cryptocurrencies and Rising Bitcoin Market Cap

The banking crisis that has rocked the US and Europe this year has had far-reaching consequences.

While banks' exposure to the energy sector and property lending have been cited as reasons for the current crisis, it cannot be denied that the traditional banking sector is experiencing a significant shock.

The possible collapse of First Republic Bank and the previous collapses of Silicon Valley Bank and Signature Bank have revived interest in cryptocurrencies such as bitcoin and ethereum.

The value of BTC and other cryptocurrencies lies in their decentralized nature, with no single entity controlling them, and their limited supply, as they have a limited supply.

 Bitcoin Market Cap Could Be US$2 Trillion! This is the Sign 

With a Bitcoin market cap of over US$1 trillion, BTC has proven itself to be a reliable store of value, remittance, and safe haven.

In times of crisis, such as banking crises, bitcoin's relative stability has made it an attractive investment alternative to traditional investment options.

The Bitcoin Halving and the Fed's Monetary Policy

The next cut in the bitcoin supply, known as a halving , is scheduled for April 2024. Halvings are pre-programmed events that occur once every four years, reducing the rewards for mining new BTC by 50 percent.

This event reduces the supply of new bitcoins, making them a scarce digital asset. Previous halving events in 2012 and 2016 have been bullish catalysts and were able to increase Bitcoin's market cap , and the upcoming event is expected to be no different.

Moreover, hopes that the Fed can weaken their monetary tightening policy could also provide a boost to the bitcoin price.

The Fed's monetary policy has a direct impact on the value of the US dollar, with looser monetary policy leading to a weaker dollar.

Bitcoin and other cryptocurrencies could benefit from a weaker dollar, as investors seek alternative investment options.

The Return of Ethereum and Institutional Activity

While Bitcoin has dominated the cryptocurrency market, ethereum has also experienced a significant renaissance.

Ethereum is the second largest cryptocurrency by market cap, and its recent rise can be attributed to institutional activity.

ETH is a blockchain- based platform that enables developers to create dApps and smart contracts. The rise of decentralized finance (DeFi) and non-fungible tokens (NFT) has pushed the price of ETH higher.

DeFi is a blockchain- based financial system that eliminates intermediaries such as banks, allowing users to access financial services such as lending, borrowing and trading without having to trust a centralized authority.

NFTs are unique digital assets that can be used to represent ownership of digital assets such as art, music and collectibles. Both DeFi and NFT are built on top of the ethereum platform, making ethereum a key player in these new markets.

Institutional investors have noticed ethereum's potential, with major financial institutions such as JP Morgan and Goldman Sachs investing in ethereum-based projects.

Ethereum Improvement Proposal (EIP) 1559, which is scheduled to launch in July 2021, aims to increase ethereum transaction fees by burning a portion of those fees rather than paying them out to miners.

This proposal could increase ethereum supply constraints, potentially pushing ethereum prices higher.