The global crypto market capitalization has broken $2 trillion for the first time since early March, but current macroeconomic conditions suggest new highs could be some way off.
Bitcoin topped $43,000 early Tuesday while Ethereum crossed $3,000—bringing the total crypto market cap back above $2 trillion.
Crypto Market Back Above $2T
The crypto market is showing signs of life.
Per data from CoinGecko, the global market cap for the emergent asset class broke $2 trillion for the first time since Mar. 3 today as Bitcoin, Ethereum, and other digital assets rallied. Bitcoin, by far the biggest cryptocurrency with a market cap dominance of around 40%, crossed $43,000 earlier this morning after a 4.2% jump.
Ethereum also broke a crucial resistance level at $3,000, crossing the milestone for the first time since the beginning of the month. In recent months, the two top crypto assets have struggled to hold momentum amid Russia-Ukraine tensions and uncertainty over the Federal Reserve’s interest rate hikes; they’re both around 38% short of their November 2021 all-time highs.
Besides Bitcoin and Ethereum, several other assets have rallied today. Cardano and Polkadot, two smart contract networks hoping to grab market share from Ethereum, have respectively gained 6.4% and 6.5%. Interestingly, some of the top performers of the day are older, dormant projects that rose to prominence in the 2017 bull run, including Bitcoin Cash, EOS, and Ethereum Classic. They’re respectively up 12.2%, 10.7%, and 9.7%.
Meanwhile, other more recent winners have underperformed in the last 24 hours. Avalanche and Terra, for instance, have both dipped despite showing strength over the past week. JUNO and Osmosis, two fast-growing projects in the Cosmos ecosystem, are also down today.
The market has struggled to hold its highs in recent weeks, thanks partly to the macroeconomic climate and negative sentiment. When the CPI print for U.S. inflation came in at 7.9% for February earlier this month, Bitcoin barely reacted despite its supposed role as an inflationary hedge (it hit an all-time high of $69,000 on similar news back in November).
In recent weeks, commodity prices have also soared after the world shunned Russia for invading Ukraine, sparking fears of a global recession. That means risk-on assets like crypto could have a difficult few months ahead despite the recent uptick in the market.