How Cryptocurrency Stacks Up Against Gold and Other Assets
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Chapter 1: Introduction to Cryptocurrency Market Capitalization
In 2021, the cryptocurrency landscape achieved unprecedented heights, with its total market capitalization exceeding $2 trillion for the first time.
NGRAVE has contextualized this achievement by evaluating the scale of the cryptocurrency market relative to more established asset classes. This comparison highlights the significance of cryptocurrencies within the broader financial ecosystem.
The first video discusses Lawrence Lepard's perspective on Bitcoin potentially overtaking gold as a major asset, exploring the dynamics of this transition.
Section 1.1: Cryptocurrency vs. Precious Metals
Currently, gold boasts a market capitalization of approximately $11.4 trillion, making it roughly five times larger than the cryptocurrency market and 13 times larger than Bitcoin, often referred to as "digital gold."
NGRAVE notes that in 2021, Bitcoin experienced new all-time highs (ATHs) while $10 billion was withdrawn from gold funds. This trend underscores the growing competition between Bitcoin and gold, as Bitcoin increasingly positions itself as a reliable "safe haven" asset.
Interestingly, the total market value of cryptocurrencies surpasses that of silver, which stands at $1.28 trillion, indicating a thriving crypto market.
Subsection 1.1.1: Real Estate and Cryptocurrencies
The global real estate market, often dubbed "the most significant store of wealth known to mankind," is estimated to be around $340 trillion—about four times the size of global GDP—indicating that cryptocurrency still has a long way to go in this arena.
Section 1.2: Cryptocurrencies and Equities
While the crypto market remains relatively small compared to the $122 trillion global stock market, it has more in common with the European stock market, valued at $14 trillion, and the U.S. stock market, which is estimated at $50 trillion.
NGRAVE asserts that the cryptocurrency market is noteworthy when compared to GDP, ranking within the top ten alongside countries like France ($2.63 trillion) and Italy ($1.889 trillion). The leaders in this category are Japan ($5.058 trillion), China ($14.723 trillion), and the U.S. ($20.894 trillion). Bitcoin alone could secure a position in the top 20.
Chapter 2: Cryptocurrency and Global Debt
The second video delves into the distinctions between gold and Bitcoin, further illustrating the evolving landscape of these assets.
As global debt hits a staggering $226 trillion, cryptocurrency's market capitalization closely aligns with the U.K.'s national debt of $2.97 trillion, as well as the U.S. budget deficit for 2021 ($2.77 trillion) and student debt ($1.7 trillion).
NGRAVE estimates the overall value of the crypto industry—encompassing companies beyond just cryptocurrency issuance, such as hardware wallets, marketing agencies, mining operations, and blockchain startups—to be between $2.35 trillion and $2.9 trillion. This positions the crypto sector among the top ten global industries, surpassing telecom ($1.74 trillion) but still trailing behind automotive manufacturing ($3 trillion), oil and gas ($4.6 trillion), and food production ($5 trillion).
The financial services industry remains the largest, valued at $22.5 trillion.
Compared to top global stocks, cryptocurrency market capitalization is quite comparable. Apple leads with a market cap of $2.98 trillion, followed by Microsoft at $2.51 trillion, and Alphabet at just under $2 trillion. NGRAVE highlights that Bitcoin could reach a $1 trillion market cap faster than these tech giants, achieving this milestone in just 12 years—half the time it took Amazon.
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