In Brief: Crypto Market Surpasses $4T Milestone Amid Institutional Adoption
January 5, 2024 – WASHINGTON
The total market capitalization of all cryptocurrencies surpassed a landmark $4 trillion threshold Friday before briefly pulling back, as surging institutional investment and new regulatory framework drives bolstered prices, particularly for Bitcoin (BTC) and Ethereum (ETH).
- Bitcoin reached a market cap exceeding $2.395 trillion, while Ethereum’s valuation surpassed $440 billion.
- Spot Bitcoin ETFs attracted $522.6 million in inflows Thursday, extending a two-week streak of significant funding, which now totals over $4 billion.
- Institutional adoption accelerated following the bipartisan passage of key US crypto legislation.
Friday morning saw the consolidated crypto market cap exceed $4 trillion—a first-time occurrence that signals the maturation of the industry as a mainstream asset class, analysts said.
At the height of the momentum, Bitcoin climbed intra-day to approximately $120,336, a level it previously reached only once, while Ethereum’s price surged to nearly $3,647 per coin, according to CoinGecko data released Friday morning.
The Legislative Push: The market surge closely followed the Thursday passage of two significant bills: the Government Endorsed National Stablecoin Utilization Act (GENIUS Act) and the Cryptocurrency Legislation, Acknowledgment, Regulation, Integrity And Transparency for Tax And Investors Act (CLARITY Act). These bills establish a federal framework for stablecoins and provide a clear legal structure for broader crypto assets.
Both measures are expected to be signed into law by President Trump shortly after delivery.
Strong Institutional Flows: The simultaneous events coincided with robust capital inflows into approved Bitcoin ETFs, demonstrating a powerful correlation between the legislative developments and institutional enthusiasm.
“The $4 trillion crypto market milestone underscores the industry’s rise as a mainstream asset class,” Devere Bryan, Group General Manager of stablecoin issuer First Digital, told Decrypt. “Bitcoin’s status as digital gold fuels unparalleled wealth creation.”
Analyzing the trend points toward an emerging phenomenon: the onset of “altcoin season.”
According to market observers, Ethereum’s market dominance saw a jump from 9% to 11%, while Bitcoin’s share dropped by four percentage points. This realignment suggests an investor rotation away from the largest cryptocurrency into higher-risk, potentially higher-return opportunities.
“Institutional capital is finding its footing, with Ethereum’s surge past $3,600 backed by a hefty $726m in single-day ETF inflows signalling systematic adoption,” Sohan Sen, head of Structured Products at Mantle, told Decrypt.
Sen noted that sustained value depends on underlying infrastructure, citing Ethereum’s role in hosting substantial stablecoin supplies as evidence that “programmable money is inevitable as table stakes in the future of finance.”
Market Consolidation Expected: Following Bitcoin’s speculative breakout past the $120,000 mark, analysts caution that profit-taking signals a potential pause. They anticipate short-term consolidation as the rally consolidates.
“[…] may provide a more stable foundation for the current rally to consolidate,”” QCP Capital analysts stated.
Prediction markets further indicated trader sentiment is tilting towards near-term pullbacks, with the overwhelming majority of users on Myriad expecting Bitcoin to close significantly below its peak high for the day.
