Digital currencies are now worth $ 2 trillion

The market capitalization rises above this particular brand for the first time. The small crypto currencies in particular benefit. But investors have to be careful.

The current rally isn't necessarily due to Bitcoin.

UWith the cryptocurrency Bitcoin, things have become relatively quiet over the past few weeks. The oldest digital currency has been hovering between 50,000 and 60,000 dollars for a month. But in their slipstream, numerous other crypto currencies are reaching new record highs. You can see that in the market capitalization of all 9,125 digital currencies, which broke the $ 2 trillion mark for the first time. It has increased tenfold within a year, and has almost tripled since January.

The importance of Bitcoin has decreased slightly: While almost 70 percent of the market capitalization was represented by the oldest digital currency at the end of the year, it was around 56 percent on Tuesday. That’s equivalent to $ 1.1 trillion. But the look at the so-called altcoins is more exciting. The word is a mixture of “alternative” and “coin”, and that’s exactly what it’s about: This is how all digital currencies except Bitcoin are called.

The second most important digital currency, Ethereum, still has 245 billion dollars, which is currently around 12 percent. But that was also more than 16 percent around the turn of the year. The market capitalization has even increased since the turn of the year, at that time Ethereum was worth only 81 billion dollars and has tripled. This shows: Ethereum has developed well, but other digital currencies are much better. And this is exemplified by the number three of the digital currencies, the Binance Coin: It only has a market capitalization of 60 billion dollars and thus only about 3 percent share.

But from here you can see the changed meaning of the small currencies very well: At the turn of the year it was less than one percent. In absolute terms, it is even more impressive: Around the turn of the year, the Binance Coin was only worth around $ 5 billion – so its price has increased twelve-fold since then. While the importance of the two largest currencies has fallen from 86 percent to 68 percent, the proportion of small crypto currencies has more than doubled from 14 percent to 32 percent.

This makes the market even more confusing for investors. Many of the small currencies cannot yet be bought through regulated marketplaces. This also increases the risk of cheating. There is always worrying news about foreign exchanges like Binance – which issues the Binance Coin. Confidential documents were published in the fall, showing that Binance had created a complex corporate structure in order to deceive the American supervisory authorities.