The cryptocurrency market is on the rise since the very beginning of 2017. The 24-hour total trading volume for digital currencies hit the $50 billion mark briefly last week. Quite interestingly, the New York Stock Exchange (NYSE) was also doing similar trading volumes at that time. While some are calling this an important milestone for the not-so-conventional crypto-market, others are cautious in their views.
It does seem like an impressive achievement, considering the short period of time the cryptocurrency market has been in existence for. While the stock market has been trading for decades, digital currencies were merely introduced over the last ten years.
The reasons why investors have come pouring into the cryptocurrency industry this year are many. The market grew at a striking rate, with bitcoin repeatedly touching new all-time highs. As more people began to invest in bitcoin, the price rose even further.
Records have been broken
Bitcoin reached its latest record-breaking high of almost $20,000 this month, having started at $1,000 in the beginning of 2017. Other currencies, such as ethereum and litecoin, saw commendable progress as well this year. Although out shined by bitcoin, 2017 was a good year for many coins.
Currently, there are over 1,000 different digital currencies. Some of these digital currencies only make up a very small portion of the market. The largest cryptocurrency, bitcoin, accounts for a major portion of the market’s entire market cap. On the other hand, NYSE’s trading volume is not affected as much by the NYSE's top 10 stocks.
However, comparing the entire cryptocurrency market to just NYSE is unfair. If a comparison must be made, then it should be with fiat currency exchanges. On average, these exchanges have noteworthy trading volumes of $5 trillion. The cryptomarket’s seemingly remarkable $5 billion is obviously nowhere near this figure.
In addition to the aforementioned factors, the controversy to which cryptocurrencies are always subjected to must also be considered. Their lack for regulation and notorious volatility have always made financial regulators criticize them.
Cryptocurrency exchanges also lack the advanced infrastructure of stock exchanges. This has led to a number of major exchanges slowing down due to increased traffic and increased demand for transactions. Still, the market’s growth is commendable on its own.