Bitcoin is definitely the numero uno cryptocurrency measured by market capitalization and there has been no change on this for a decade since Bitcoin’s genesis. Now, Bitcoin has the same level of market capitalization as Netflix and ATT.
But, some people still call it a scam or don’t understand it completely even after a decade of its existence. Is it still magic money even now? To have a fair comparison, Bitcoin is achieving market cap that is equal to a few of the world’s top recognizable companies.
Bitcoin market cap is measurable by multiplying the circulating supply by current crypto market price. Bitcoin’s current market cap stands at $216 billion. It has grown from around $100 billion level around the all time lows from the 2018 bear market to stand at $216 billion now.
The momentum is growing and everything seems to be positive for Bitcoin. Market cap can only grow higher from here. Obviously, price moves the market cap more than the increase in supply through bitcoin mining. The current halving slashed the bitcoin reward per block to 6.25BTC from 12.5BTC. The increase in supply is going to be slower for the next 4 years.
What does Bitcoin Market Cap compare to in Stock Market?
Bitcoin is comparable with the entertainment streaming giant Netflix (NFLX) and telecom behemoth AT&T (T) in terms of market cap. Remember, Bitcoin has the Netflix market cap without even being discussed as much as Netflix in family dinner conversations. Bitcoin Netflix are synonymous for their cult followers.
Bitcoin had its highest market cap at $300 billion dollars in Dec 2017, at the peak of the bull run. Remember, every block produces 6.25BTC and adds it to circulating supply. Before 2020 halving, it’s at 12.5BTC per block.
So, if we now have the same prices as of Dec 2017 with the current circulating supply, it will put the most premium cryptocurrency on par with banking behemoth Chase and Card Payments industry behemoth Mastercard.
If that happens now, people who HODL their Bitcoin, will go to moon. The decentralization mission of Bitcoin may make traditional financial institutions redundant. Credit cards and banks may be replaced with Decentralized Finance or something similar.
Bitcoin has had days of high volatility and in general has moved between 3.2K and 13.8K after the bull market run of 2019. We are all waiting to break that long term triangle formed in price action.
Once we break these resistances and reach 15K, that is when a lot of people might start noticing again. We repeat the cycle of non-existent price resistance and go into extensive bull market from there.
How Does Ethereum Fare?
Ethereum is the second largest cryptocurrency by market cap, with a $44 billion market cap. This puts the smart contract crypto on the same level with Dell and Charles Schwab. Decentralized Finance, also known as DeFi, is undergoing a massive increase in market cap within the Ethereum ecosystem. My personal thought is that it has not moved the price of Ether, the currency in Ethereum network, as much as it should have. There is so much value and hence price movement will come with more adoption.
Most companies that have been compared with Bitcoin and Ethereum above have been around for decades building up their business, investing millions to build up Intellectual property, proprietary infrastructure, customer service and business practices. Bitcoin and Ethereum have risen to compete in market cap valuation with some of the most well-known businesses.
The best thing is it has grown so quickly in a fraction of time with completely open-source code and organically grown communities. These communities want to remove centralization and build things in a decentralized fashion. Hopefully the decentralization movement wins soon!!!
I am a data analyst by profession who loves to crunch numbers at daytime and come home wondering how my passive income numbers for the day look like. I believe in being rich rather than looking rich. Follow me for Cryptocurrency, FIRE, Personal Finance, Credit Cards and Digital Nomad updates