- The total capitalization of the cryptocurrency market grew more than 50% in the last six months
- Investors Bullish as Bitcoin Price Holds Near Yearly High
- Ethereum, Litecoin and Ripple have followed Bitcoin higher
The first half of the trading year is behind us, and one of the most notable developments is the rise in total crypto market capitalization. After 2022, when many crypto investors got fed up with the industry scandals and left, the 2023 rally looks like the start of a new bull market.
The performance is even more impressive as the US dollar is trading mixed against its fiat rivals.
Renewed investor interest in cryptocurrencies saw the total market capitalization grow by more than 50% in the first half of the year. In the last week alone, the market has grown by more than 3% and investors are optimistic that Bitcoin, the leading cryptocurrency, remains close to the yearly high.
Ethereum, Litecoin and Ripple have followed Bitcoin higher
Bitcoin is the main reason investors are optimistic about the cryptocurrency industry despite ongoing scandals, fraud, and lawsuits. In the end, the only thing that matters to market watchers is that the price of Bitcoin remains close to the yearly high, despite the fact that in 2023 it rose more than 85%.
Therefore, the path of least resistance in the second half of the year seems to be bullish.
However, not all currencies worked like Bitcoin. For example, Dogecoin is flat on the year, up about +0.3% in the first six months of 2023. This is a big divergence from what Bitcoin and other cryptocurrencies (e.g. Ethereum, Litecoin, Ripple) did. and reflects the concentration of crypto investors in a few cryptocurrencies.
Moving forward into the second half of the year, crypto investors might want to watch developments in the traditional forex market. More precisely, what will the Fed do with the funds rate?
If the US dollar loses ground against its rival fiat currencies in the next six months, Bitcoin and the other leading cryptocurrencies are well positioned to rally a bit more. Since the Federal Reserve halted rate hikes in June, one should accept the possibility that the current funds rate is the terminal of this tightening cycle.
