Bitcoin Surpasses $1 Trillion Market Cap

Bitcoin recent milestone of surpassing a $1 trillion market cap is driven by increased investor sentiment and institutional interest.

After Bitcoin’s price soared above $51,000, the total market value of the cryptocurrency’s supply in circulation surpassed one trillion dollars.

Currently 19,627,443 BTC is in circulation, which accounts for 93.46% of the total supply capped at 21 million. Increased favorable investor sentiment is echoing throughout the other components of the ecosystem.

A protracted bull market and spot Bitcoin exchange-traded fund (ETF) approvals in the United States, among other factors, fuel this sentiment. Individuals and institutions significantly increased their investment contributing to the overall price growth of the cryptocurrency.

Previously, Bitcoin reached a market cap milestone of $1 trillion in November 2021, during a bull run that eventually propelled BTC to its brief all-time high of $69,000.

This particular bull run occurred during this period. While this was going on, the bull run spread throughout the entire cryptocurrency ecosystem and registering a total market capitalization of 3 trillion dollars in cryptocurrency for the very first time.

The imminent halving is anticipated to have a significant effect on contributing to the further increase in the market price of Bitcoin.

According to a Grayscale analysis, Bitcoin exchange-traded funds (ETFs) can potentially significantly alter the demand-supply ratio of the cryptocurrency, thus counteracting the selling pressure caused by the halving.

“Post-halving, these requirements will decrease by half: with only 3.125 Bitcoin mined per block, that equates to a decrease to $7 billion annually, effectively easing the sell pressure.”

According to the findings of Grayscale’s investigation, the current mining rate of 6.25 bitcoin per block amounts to nearly $14 billion annually. This is significant when taking into account the price of $43,000.

To put it another way, to keep prices at their current levels, there must be buying pressure amounting to $14 billion over the same period. There is a clear correlation between the price of bitcoin and the operational expenditures of the mining community’s operational expenditures.

Given that the next halving event will reduce the mining reward by half bringing it down to 3.125 BTC, it will be necessary for BTC to continue to have a high market value in order for mining to be a sustainable business model.