Crypto Marketcap Above $2T as Russia-Ukraine Peace Talks Make Progress
The cryptocurrency market appears to have the wind in its sails as the first quarter of 2022 wraps up. According to Coinmarketcap, the total crypto market cap surpassed the $2 trillion mark this week. Stocks also saw impressive gains as Russia’s invasion of Ukraine shows signs of stopping with peace talks making progress.
Bitcoin Touches $48,000 and Leads the Crypto Market Rally
Bitcoin, currently among the top ten assets globally, led the digital assets rally in price this week. Yesterday, BTC hit the $48,000 price mark, effectively breaking out of the $34,000-$44,000 range it had traded all year long. The pioneer digital asset had posted an 18% gain after recording a low slightly above $40,000 on March 21.
Coinmarketcap shows that Bitcoin has a total market capitalization of $902 billion. However, it is still a long way off recapturing the $1 trillion it held in November. Although still the most popular cryptocurrency, its market dominance has gradually declined from about 70% in early 2021 to only 42%.
While Bitcoin has helped significantly, the grinding journey back to $2 trillion has been aided by a boom in coins and tokens. Since November, the number of digital assets has exploded, with about 5,000 new coins added, according to Coinmarketcap. This has taken the overall number to over 18,500.
Digital assets such as Ethereum, Terra, Cardano, Dogecoin, and Shib have all posted double-digit gains in the past week. Essentially pushing the entire space to regain higher grounds.
Consequently, several reasons are being overlooked as the cause for the strong performance seen in the market. One of these is the breakthrough in discourse over a cease-fire in the Russi-Ukraine conflict.
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Russia to Scale Down Military Operations in Kyiv and Other Cities
A breakthrough in talks between Russia and Ukraine has happened more than a month after the commencement of hostilities. On Tuesday, Russia vowed to reduce military operations around Kyiv, as Ukraine proposed adopting a neutral status to signify progress in peace talks.
The decision came following talks held in Istanbul over the conflict that has left thousands dead or injured and over four million people displaced. On the other hand, Russia has been hit with severe sanctions resulting in an economic downturn for the Kremlin. However, the US has warned that Moscow’s threat still exists even as the possibility for a compromise grows.
The conflict has significantly affected the digital asset space and traditional finance. Both segments saw significant fall-offs in price since the invasion started, while traditional risk-off assets like gold started rising. However, both crypto and stocks have performed well recently, probably reacting to the news of a possible end to hostilities.
Following the news, the Dow Jones Industrial Average increased by 0.97%. The S&P 500 increased by 1.23%, while the Nasdaq Composite shot up 1.8%. This increase may further substantiate claims that crypto is yet to decouple from stocks after all.
The breakthrough in peace discussion may just be one of several factors that have caused a price surge, especially in crypto. Terra Labs’ moves to purchase $10 billion worth of BTC as collateral for its UST stablecoin may have also caused the increase. The growing demand resulting from the intended purchase and the increasing number of hodlers has possibly caused the spike. The investment has seen Luna break its previous all-time high price of $104, with its TVL surpassing $26 billion.
Not to be left out, perpetual dip buyers, Microstrategy has also taken a $205 million Bitcoin-backed loan intending to purchase more BTC. This will only cause demand to increase further, and if investors hodl and do not paper hand their holding, we may further surges in price this year.
Do you think crypto’s market cap can soon hit the previous heights of $3 trillion if the conflict in Europe ends? Let us know your thoughts in the comments below.
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