In the span of just over a decade, Bitcoin has gone from a puny asset to one worth over $170 billion. It’s a rally that has caught many off guard, evidenced by those that have long asserted the cryptocurrency is a Ponzi scheme or otherwise.
Data shows, however, that BTC remains just a drop in the bucket in the macro scheme of things. A cryptocurrency research firm recently reminded its followers of this fact; it said that BTC’s market capitalization is less than 1% of that of U.S. stocks.
Bitcoin Is Still Puny on a Macro Scale
According to Weiss Crypto Ratings, at current prices, Bitcoin’s market capitalization is 1/218th the size of the U.S. stock market. That’s to say, at $170 billion, all BTC is valued at less than 0.5% of all U.S. stocks, estimated to be around $37 trillion.
The research firm postulated that if just “1% or 2% of that much wealth” was poured into crypto, Bitcoin would hit “undreamed of heights.”
Mainstream Money Is Coming
For Bitcoin to grow further, it will need to tap into the mainstream capital pools driving other financial markets.
Polls and data suggest that these mainstream capital pools are beginning to siphon money into the Bitcoin and crypto markets.
The Grayscale Bitcoin Trust, basically the only way one can get exposure to BTC via a traditional broker, has seen strong investment over recent months. Technology analyst Kevin Rooke found that there have been weeks where Grayscale buys more Bitcoin than there were produced by miners. Grayscale buys BTC on behalf of its institutional client base.
Fidelity Investments has found that this trend is likely to continue. They revealed in a recent survey that 36% of institutional respondents have some sort of exposure to the crypto market, and many more want exposure.
The respondents see promise in this market for three reasons: cryptocurrencies are uncorrelated with other asset classes, an “innovative technology play,” and have “high potential upside.”
Retail investors, too, want in on the crypto craze.
A Blockchain Capital poll that was released in April of 2019 found that there is a large number of Americans that want BTC:
“42% of those aged 18–34 said they are ‘very’ or ‘somewhat’ likely to purchase Bitcoin in the next 5 years — up 10 percentage points from 32% in October 2017.”
Propensity to Purchase Bitcoin data from Blockchain Capital’s poll conducted in April 2019
Many of the respondents to Blockchain Capital’s poll also indicated that they see Bitcoin as a positive technological trend.
Source: Read Full Article