As Bitcoin looks to be preparing for another historical Q4 rally, cryptocurrency prices have surged. The development of decentralized finance continues to grow, and the total market cap of crypto shows no signs of slowing down.
If investors continue to allocate more resources towards the development of DeFi, there is a high possibility that Bitcoin will continue to climb in price. As price approaches all-time highs, it is suspected by analysts that price will far surpass previous cycles.
When Bitcoin price moves it is common for the price of altcoins to follow. Although this is not always the case, keep in mind that just because small-cap coins can provide massive returns, their fundamental utility is often questioned, making them much riskier assets to invest in.
Cryptocurrency Market Capitalization
One year ago the total crypto market cap was about $400 billion. Today, the total market cap for all of crypto is about $2.5 trillion, marking a six-fold annual increase in market cap. The total market cap for Bitcoin is about $1.2 trillion giving Bitcoin a dominance in the market just under 50%
Cryptocurrency vs. Stocks
Cryptocurrency and stocks are different in many ways. The first is that it is very hard to value cryptocurrency because we don’t know for certain what they eventually could be worth. This makes cryptocurrencies a much riskier investment, as they are more volatile assets than traditional stocks.
The second large difference between crypto and stocks would be that you can trade crypto at any time in the day any day of the week, and stocks can only be bought and purchased during market hours. This provides much more flexibility for investors and traders, who are looking to trade their assets.
The final difference would be the actual type of asset. When investors purchase shares of a company they are actually buying ownership of that company. On the other hand, when investors buy crypto they aren’t necessarily purchasing part of the company, they are buying an asset. An asset’s value is determined by the community. This is one reason why crypto is so volatile because the price is often speculative.
Bull Case For BTC, LTC, ETH and DOGE
Bitcoin holds almost 50% of the market dominance of crypto, so it is very common for altcoins to follow the price action of Bitcoin. Keep in mind that many small-cap coins have no utility and are completely speculative, although they may provide more than 100% gains.
Nick Spanos, the creator of the Bitcoin Center NYC and co-founder of Zap.org, along with many other credible analysts, predicts that Bitcoin will pass $100,000 before the end of the year. As Bitcoin is the spine of the crypto market, this is not an unrealistic expectation. Moreover, we’ve seen Bitcoin increase over 100% from August 2021 to October 2021, so if Bitcoin continues this pace, it may surpass $100,000 this year.
Spanos analysis for Ethereum puts the price at $10,000 to $12,000 per ETH by the end of the year. This is a realistic price target as Ethereum is the most popular layer-1 network for smart contract developers. Price will also continue to climb once Ethereum releases the final rollouts of ETH2.0, implementing PoS to the mainnet which will heavily increase scalability.
If the price of Bitcoin continues to climb at its current rate and Litecoin’s price follows, it is not unrealistic to see LTC at $400 per coin at the end of this year. This would put LTC in a zone near its 2017 all-time high.
Dogecoin’s value is complete speculation. Although if the price reflects the movement of Bitcoin, it could be possible to see Dogecoin work its way back to its previous all-time high by the end of the year. For this to happen, there will need to be newfound hype over the coin in the coming months.
Bear Case For BTC, LTC, ETH, DOGE
There is the possibility that Bitcoin gets rejected at its all-time high or endures a massive correction after its breakout, although it is unlikely. If there is a correction in the price of BTC, we can expect the rest of the crypto market to follow. The correction for small-cap cryptos may be larger as they are less fundamentally strong projects.
Where to Buy Cryptocurrency
IBKR and eToro are great exchanges that offer all blue-chip cryptos. A centralized exchange like IBKR and eToro is a perfect way for individuals to start investing. Make sure to do your own research to find out what exchange is best for you.
eToro, headquartered in Cyprus, England and Israel, has provided forex products and other CFD derivatives to retail clients since 2007. A major eToro plus is its social trading operations, including OpenBook, which allows new clients to copy trade the platform’s best performers. Its social trading features are top notch, but eToro loses points for its lack of tradable currency pairs and underwhelming research and customer service features
- U.S. based cryptocurrency traders
- Social and copy traders
- Simple user interface
- Community engagement and following other traders
- 25 cryptocurrencies
- Expansive network of social trading features
- Large client base for new traders to imitate
- U.S. traders can only buy cryptocurrency
Coinbase is one of the Internet’s largest cryptocurrency trading platforms. From Bitcoin to Litecoin or Basic Attention Token to Chainlink, Coinbase makes it exceptionally simple to buy and sell major cryptocurrency pairs.
You can even earn cryptocurrency rewards through Coinbase’s unique Coinbase Earn feature. More advanced traders will love the Coinbase Pro platform, which offers more order types and enhanced functionality.
Though Coinbase doesn’t offer the most affordable pricing or the lowest fees, its simple platform is easy enough for complete beginners to master in as little as a single trade.
- New cryptocurrency traders
- Cryptocurrency traders interested in major pairs
- Cryptocurrency traders interested in a simple platform
- Simple platform is easy to operate
- Comprehensive mobile app mirrors desktop functionality
- Coinbase Earn feature rewards you with crypto for learning about available coins
- Higher fees than competitors
Can The Cryptocurrency Markets Reach $10 Trillion?
Considering one year ago the total crypto market cap was roughly $400 billion, if the market cap continues to grow by a modest 200% annually, we could see a $10 trillion market cap within 2 to 3 years.
The market cap for gold is roughly $11 trillion, so if the total crypto market cap continues to grow 200% annually, it is very possible to surpass the market cap of gold. Since gold is a such strong commodity in today’s society, it may take longer than expected for Bitcoin to overtake gold as the go-to store of value. The price implications of this would mean roughly $500,000 per BTC if Bitcoin continues to hold around 50% market dominance.
Where To Store Cryptocurrency Safely
When thinking about how to store your cryptocurrency there are two paths to choose from: software wallets and hardware wallets.
- A software wallet is an application on your computer or mobile device.
- A hardware wallet is a special type of wallet that stores the user’s private keys in a secure physical device — keeping your private key information off your computer and onto the external device.
Best Hardware Wallet: Ledger
Ledger is the most recognized and most credited hardware wallet currently available. The device is primarily an offline hardware wallet. Ledger also connects to Bluetooth and USB depending on if you want to use your computer or mobile device. Ledger’s application also makes it much easier to secure, store and manage your assets.
Best Software Wallet: ZenGo
ZenGo is a mobile software wallet that makes an excellent wallet for beginners looking to invest in cryptocurrency. The wallet also removes the worry of keeping private keys and seed phrases with the facial biometric feature.
Keep an eye out for government regulation and crypto-related policies that may come out within the processable future, as they will heavily impact the price of crypto.
Current Cryptocurrency Market Movements
Overall market sentiment is strong as we approach a new all-time high for Bitcoin. If Bitcoin breaks its current all-time high we can expect a generous increase in total crypto market cap. Check out the table below for real-time cryptocurrency prices.
Is Cryptocurrency a Good Investment?
If you believe in the development of DeFi and are not afraid to invest in more high-risk assets, then cryptocurrency may be a great investment. If you are looking for less-volatile assets, then cryptocurrency may not be a great choice for you.
Investing in cryptocurrency and digital assets can be highly risky, so do not invest more than you can afford to lose. Make sure to always do your own research on projects before investing.
Benzinga crafted a specific methodology to rank cryptocurrency exchanges and tools. We prioritized platforms based on offerings, pricing and promotions, customer service, mobile app, user experience and benefits, and security. To see a comprehensive breakdown of our methodology, please visit see our Cryptocurrency Methodology page.
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