Irrespective of its seemingly ever increasing value, Bitcoin is a baby. With the recent total market cap of the cryptocurrency market crossing over the $300 billion mark, it is both exciting and terrifying at the same time. The virtual currency world that began less than 10 years ago has grown astronomically in such a short space of time.
Indeed, 2017 alone has seen just Bitcoin go from $800 to nearly $10,000, and there is still a month to go. The records have crumbled for the Big digital currencies, as well as the new ones as the boom in ICO’s have also help set unprecedented growth.
Thus, as the most impressive performing asset class ever seen, surely Bitcoin is about taking over the world? Even that has two ways of being viewed – in relation, or in fear – but, no, Bitcoin is a baby.
Considering the actual commodity markets out there, and evaluating Bitcoin’s $300 billion, it quickly surmises that Bitcoin is still splashing in the shallow end.
Gold, which Bitcoin is supposed to be challenging, has a market cap of $6 trillion. On top of that, only about a fifth of all the mined gold is held for private investment purposes, the rest is either in jewellery – the large majority – or the official sector, or still underground.
Thus, seeing as the value of all gold mined comes in just over $7 trillion, about $1.6 trillion of it is being used for private investment purposes.
Looking deeper into the markets. Equities, another investible asset, has a market cap of $55 trillion; then there is $94 trillion in securitized debt and $162 trillion in residential real estate, according to a 2016 report.
Bitcoin is not even close to being overvalued
So, what does it mean if Bitcoin is a record breaker for speed, but not for size? It is the focal point of all the bubble talk that is floating around there. For a market that only makes up 0.3%, when put next to residential estate value, securitized debt, equities, commercial real estate, farmland and gold, – bitcoin can hardly be called a massive bubble.
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