Even bitcoin’s huge gain this year doesn’t look that impressive when comparing against global equities.
Bitcoin’s blistering rally needs to be viewed with some perspective.
Yes, its market cap of about $180 billion is the same as Coca-Cola’s. And yes, it’s more than 10-fold increase has become near legendary — it touched yet another record today as it climbed to $11,845. But in the broader scheme of the financial market, it’s a gnat — equivalent to less than 2 percent of any major class and 400 (!) stocks have bigger gains this year.
Here’s what bitcoin would roughly equal as a percentage of the total value of the following sectors. The market sizes were taken from the Money Project.
2.4 percent of the $7.6 trillion coins and bank notes 2.3 percent of the $7.7 trillion gold market 0.25 percent of the $73 trillion global stocks market 0.19 percent of the $90.4 trillion of broad money supply 0.083 percent of the $217 trillion real estate market 0.033 percent of the $544 trillion derivatives market.Maybe a more fair comparison would be to compare the total cryptocurrency market against these asset classes, but that wouldn’t move the needle much as bitcoin makes up half of it.
These comparisons could be used by critics to dismiss bitcoin as a fad, and some may question all the fuss over such an insignificant asset — if it can even be called that. Claims that it can replace fiat money seem overblown, if it’s less than 3 percent of money in circulation. European Central Bank President Vitor Constancio dismissed that bitcoin posed a threat to monetary policy and compared it to the tulip bubble of the 17th century.