At $16,500, Bitcoin’s market cap would match that of JPMorgan,
illustrating just how early the crypto sector is in its growth phase.
The sentiment around Bitcoin (BTC)
has become noticeably positive after the breakout above $12,000 in
August. If this momentum continuously strengthens over the medium term
and BTC hits $16,500, it would equal JPMorgan’s market cap.
Earlier today MMCrypto, an on-chain analysis firm, outlined
major financial and tech conglomerates’ valuations relative to BTC’s
potential price. At the following price points, Bitcoin would equal the
market caps of the respective companies:
BTC market cap share of top companies at various prices. Source: Twitter
If
Bitcoin price were to reach $18,324 it could mirror Mastercard’s market
cap, and if it reached $20,182 it would rival Tesla’s market cap.
For
Bitcoin, $16,500 is significant because of a CME gap at this level. CME
gaps emerge when Bitcoin’s price moves below or above the price last
seen on the CME market before it closes.
Since the CME
Bitcoin futures market closes during the weekends, it often causes gaps
between CME and the rest of the cryptocurrency market to emerge. The two
gaps currently open are found at $9,650 and $16,500.
BTC/USD monthly chart. Source: TradingView.com
Market cap comparisons with companies show early phase of Bitcoin growth
Bitcoin
is a peer-to-peer currency that is typically considered to be digital
gold. Since it does not have dividends, revenues, and other
characteristics of a company, it cannot be directly compared to
conglomerates, but the comparisons show just how early Bitcoin is in its
growth phase.
The asset that comes closest to Bitcoin
in terms of characteristics is gold. Recently, billionaire investor and
Gemini exchange co-founder, Tyler Winklevoss, wrote a research report
stating that BTC is like gold but an order of magnitude better.
Winkelvoss
said Bitcoin is better at being gold in portability and has a fixed
supply capped at 21 million. Meanwhile, the supply of gold could
continue to expand if new sources of the precious metal are found. He explained:
“As it turns out, bitcoin is better at being gold than gold — and not just incrementally, but by an order of magnitude or 10X better. It is a widely held belief in technology circles that when a product is 10X better than its closest substitute, it will escape its competition. We believe Bitcoin has achieved this.”
The supply curve of Bitcoin. Source: Winklevoss Capital
Despite
the immense amount of trading activity, computing power, and
infrastructure supporting Bitcoin, its market cap remains at around $198
billion.
The entire crypto market cap is smaller than Tesla’s
Analysts often draw comparisons between Bitcoin and Tesla because of the retail demand for both assets.
According to TradingView, Tesla and Bitcoin were the most viewed assets in the U.S. throughout July. The firm said:
“Tesla stock is the most viewed asset in America. Our data shows that throughout July, Tesla was the most viewed stock in 31 states. Bitcoin was not far behind. Since the start of the year, Tesla’s stock has almost tripled in price. Meanwhile, Bitcoin is up 60% year-to-date.”
Tesla is the most dominant company in the electric car market, but Bitcoin is the frontrunner of an entirely new asset class.
Tesla market cap vs BTC market cap. Source: TradingView
Currently,
the market cap of the entire cryptocurrency market is smaller than the
market cap of Tesla but as demand for Bitcoin increases and the
decentralized finance sector grows this imbalance could begin to change.
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