Crypto explosion: 75% of total market capitalization dominated by only 5 coins
There is no stopping crypto and the only way is… up.
The decentralized and unregulated nature of cryptocurrencies is one of their key selling points. With minimal government control and billions of dollars in circulation, some individuals want a piece of the digital currency market.
Back in February 2022, Statista conducted a survey on cryptocurrency and the results are striking. There are over 10,397 currencies in existence and use. This is far more than the 66 currencies in circulation and use in 2013.
This is supported by Investing.com’s own research into the abundance of the asset class. As of 2022, the site listed 10,028 currencies in circulation.
Despite being a reduced amount compared to the Statista study, this is still a significant number of currencies.
Bitcoin (BTC) leads the pack
According to TradingView, the total market capitalization of all digital currencies is currently nearly $930 billion. Bitcoin continues to dominate the market, accounting for 40 percent of the total market capitalization.
Similarly, Ethereum follows with 19.30%. These two cryptos control close to 60 percent of the market capitalization.
The top five cryptocurrencies in circulation today – Bitcoin, Ethereum, Tether, USD Coin and BNB – control a whopping 75% of the total market capitalization, according to Investing.com. The top 20 companies control an incredible 89% of the total market capitalization.
Statista cites the transparency of the process for creating cryptocurrency as one of the reasons. A person can look up how to make their own coin and presto!
Thousands upon thousands of instructions will appear, covering topics ranging from how to build your own cryptocurrency for free to how to make your own with just a certain amount of money.
While Bitcoin is booming, so are the scams
The increase in the number of cryptocurrencies in circulation is worrying. Because, under certain circumstances, these currencies are pump and dump operations that defraud investors.
An example is last year’s Save The Kids scam, which rocked both the gaming and cryptocurrency communities.
Compared to fiat currencies, bitcoin and its peers are still in their infancy. Both have some similarities that allow them to be used to pay for goods and services.
A significant difference is that digital currencies are not regulated by any governing body, while fiat currency is monitored by the central bank.
This difference is what bitcoin can learn from fiat currency. A few laws and restrictions won’t hurt the burgeoning bitcoin market.
To ensure the safety of investors, traders and consumers, government regulation and oversight is required if cryptocurrencies are to become the future of financial markets.
Crypto total market cap at $938 billion on the daily chart | Source: TradingView.com Featured image from CoinCheckup, chart from TradingView.com
