It’s safe to say 2021 has been an epic year for Bitcoin! We’ve broken the all-time high several times and even reached the $1 Trillion market cap before pulling back!
While market cap isn’t exactly the most functional metric to work with, it holds a lot of psychological value. We, humans, love “number go up” even if it’s fake. As long as it’s going up, we’re happy.
Bitcoin still has a long way to go if it’s considered an established asset due to its small market cap relative to other forms of money and financial products.
I know seeing these numbers, we’ve become desensitized to it, but Bitcoin has become more valuable in market cap than most large-cap companies. In fact, only 5 companies worldwide have a larger market cap than Bitcoin.
These are:
| Company | Country | Market Cap (T) |
|---|---|---|
| Saudi Arabian Oil Company (Saudi Aramco) | Saudi Arabia | 1,684.8 |
| Microsoft | United States | 1,359 |
| Apple | United States | 1,285.5 |
| Amazon | United States | 1,233.4 |
| Alphabet | Alphabet | 919.3 |
Stats according to statista.com
To give you an idea of what I mean, I’ve pulled some of the popular forms of “money” or rather stores of value we have and looked at their market cap relative to Bitcoin.
Silver market
Bitcoin has already hit the 1 trillion dollar market cap and is pretty close to hitting it again, covering around the 900 billion marks, so reaching silver’s market cap is a goal well within 2021’s reach.
The current market cap of Silver is $1.382 Trillion, and if Bitcoin were to reach silver market cap parity. We would have a coin price of around.
- $75 000 per coin
Gold market
There are a few people who refer to Bitcoin as digital gold or gold 2.0; personally, I wouldn’t say I like this comparison. I don’t see the point of comparing them; they both do different things. Also, saying Bitcoin is gold 2.0 seems premature until it breaks the gold market cap.
How can you be version 2 if you’re smaller and less adopted? Until Bitcoin breaks past the gold market cap, I think it can; I say let’s not call it gold 2.0 yet.
The current market cap of Gold is $11.006 Trillion, and if Bitcoin were to reach gold market cap parity, we would have a coin price of around.
- $591 042 per coin
Stock market
The current market cap of US stocks is $31.61 Trillion, and if Bitcoin were to reach the US stock market cap parity, we would have a coin price of around.
- $1 700 174 per coin
Bond market
The current market cap of the global bond market is $105.9 Trillion, and if Bitcoin were to reach the global bond market cap parity, we would have a coin price of around.
- $5 740 588 per coin
Forex market
Bitcoin currently has a 24-hour trading volume of $41,835,315,329, and when we compare that to the global forex market, which has a daily volume of $6.6 trillion.
Bitcoin is still 157 times smaller than the worlds forex market.
Market caps aren’t accurate
Since none of these financial assets uses a blockchain, we cannot know with absolute certainty how much product is out there floating around. Bitcoin, however, you can, and that’s why people can beat it down as it is so transparent.
- Silver, Gold, Stocks, Bonds, we don’t actually know how much is out there.
- We don’t know how much leverage sits on these assets.
- We don’t know how many claims are sitting on the same asset
So the market cap isn’t a fair representation, but it does give us a guide to where Bitcoin’s growth currently sits.
Still a long road to global money level
We don’t yet know what Bitcoin will become globally; will it be the world reserve currency? Will it be the world’s most pristine collateral?
Does it replace the bond market, or does it replace the forex market? We honestly don’t know at this point.
What we do know is there is still tremendous potential upside as it gobbles up value from these markets. As more value flows into Bitcoin, it also unlocks efficiency that was otherwise lost due to the shortcomings of the legacy financial system.
