Over the weekend, cryptocurrency achieved a major milestone by hitting a market capitalisation of $2 trillion. This is the second time it has happened this year which shows the growth of cryptocurrency.
According to CoinGecko, after tracking about 9000 crypto coins, they found out they now had a value of 2,108,466,906,329 dollars collectively. Since 2009, when bitcoin launched, a single coin was sold for under a cent. With this $2 trillion market, it serves as a great achievement to the industry.
It’s not the first time that digital currencies have crossed $2 trillion. When cryptocurrency reached its highest-level peak in April, it reached the 12-digit number before a dramatic drop in value. Most of the market cap of cryptocurrency comes from bitcoin, which surged to its highest level since May.
The price of Bitcoin reached USD $48,152 (USD $65,439) on Sunday, but fell to USD $47,526 (USD $64,639) on Monday. The market capitalisation is $US894 billion, making up just over half of cryptocurrency’s total value according to Bitcoin Trader App.
Currently, there are over 8000 different types of cryptocurrencies. The market capitalization of $US2 trillion has been significantly boosted by these other cryptocurrencies asides from bitcoin.
Some of them include Ethereum which is currently valued at USD $3290 a coin, with a market capitalization of USD $387 billion as of the time of writing. The first Ethereum coin was worth only $A3.76 when it started trading in 2015.
Another coin is Cardano which is now the third-largest cryptocurrency. Cardano gained 47 percent just last week alone. In that same period, Binance coin has increased by 14 percent, XRP by 61 percent, and dogecoin by 18 percent. All these are huge improvements to the value of crypto coins.
Regulatory Landscapes and compliance challenges
The explosive rise in popularity and price of cryptocurrency has led to increased scrutiny from governments and regulatory bodies. There have been enforcement actions and a renewed focus on the regulation of crypto activities and participants, even as the legislation plays catch up concerning players in the virtual currency arena.
As President Biden appointed Gary Gensler as the new Chairman of the Securities and Exchange Commission (SEC) in April, cryptocurrencies, and other financial technologies have entered a new era. Having been the Chairman of the Commodity Futures Trading Commission before joining the SEC, Gensler taught at MIT, where he focused on blockchain technology and digital currencies, which indicates that the crypto-regulatory space will continue to evolve.
Preliminary conditional approval for the application to charter Paxos National Trust was announced by the Office of the Comptroller of the Currency on April 23. In case Paxos is granted a federal trust charter by the OCC, the firm will become the third cryptocurrency firm to receive one.
The federal government’s focus on cryptocurrency regulation has been at administrative and agency levels. This has led them to create different agencies to handle crypto regulations.
The regulators have different opinions regarding the regulation and deregulation of cryptocurrency. Additionally, different regulations classify cryptocurrency differently, which can make it confusing. For example, digital assets are regulated by the SEC as securities, while virtual currencies are regulated by the CFTC as a commodity, and by the IRS as property.
As a result, the confusion between cryptocurrency-friendly states like Wyoming and Colorado, and states with stricter regulations, such as New York, adds another layer of legal uncertainty for companies that deal with digital currencies.
Businesses must comply with regulations if they want to monitor, understand and fulfill their required duties. Non-compliance with this can lead to serious legal and financial repercussions.
To curb any issues with dealing with crypto, everyone who wants to deal with crypto has to comply with the registration and licensing requirements.