Sunday, November 5, 2017

Bitcoin's move to over $7000 takes entire cryptocurrency market cap to over $200 billion

Whether it is unfair to compare the entire cryptocurrency sphere to that of equities since there are over 1000 different and unique virtual coins is easily up for debate, but the fact of the matter is the that entire sector is dominated by just a few virtual currencies at the top of the list.  And with Bitcoin's newest move on Friday to over $7000 per coin, the market cap for cryptocurrencies has now crossed over $200 billion.

Graphic courtesy of Coin Telegraph
It has been an exciting weekend for all cryptocurrencies so far. While most altcoins have lost all of their recent gains over the past 36 hours, the bigger picture shouldn’t be overlooked whatsoever. All cryptocurrencies in circulation are worth over US$200 billion combined right now. That’s a major step forward from the US$40 billion market capitalization we saw earlier this year. It is evident Bitcoin is still the king of the hill, and that situation will not change whatsoever. 
Although things may look pretty bleak for most altcoins right now, they are also a contributing factor to the US$200 billion total market cap. Bitcoin represents the vast majority of this valuation, of course, as all bitcoins in circulation are worth over US$125 billion right now. That in itself is a pretty spectacular number, considering the total cryptocurrency market cap was under US$50 billion not too long ago. 
To that end, the Bitcoin Dominance Index has been pushed up once again. Right now, this index sits at 62.5%, clearly indicating that Bitcoin is the go-to cryptocurrency and little else matters these days.  To be sure, it is only a matter of time until the top altcoins recover in value. The Bitcoin price is still mainly driven by speculation, and it is very likely we will see a price correction around the time of the SegWit2x hard fork. – The Merkle
Yet if there is a comparison that can be made between equities and cryptos, perhaps it is seen by how stock markets have reacted in countries that have extremely high, or even hyperinflationary conditions.  Which means that as goods and services become too expensive to buy with one's currency, the only assets available are the paper ones traded on the exchanges.

And while the U.S., Europe, and Asia are not there yet, the fact that central banks have printed near infinite amounts of cheap currency have forced investors to overpay for assets like stocks, and perhaps even cryptocurrencies as a means to get out of their devaluing currency at all costs.

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