How Does Bitcoin Market Capitalization Compare to Traditional Assets?
Ever since Bitcoin was launched in 2009, every few months, we have seen headlines describing its unbelievable price rise. In the last five years, Bitcoin’s price has risen by over 1,200%!
In comparison, 2024 has been a tame year for the cryptocurrency with its price rising by a little over 110%. Nevertheless, this has not stopped Bitcoin from leapfrogging silver to become the 8th largest asset by market capitalization.
To put this stellar growth into perspective, in this article, we will discuss Bitcoin’s market capitalization, why it rises, and how it compares to traditional assets such as stocks, bonds, and gold.
What is Bitcoin’s market capitalization?
Earlier in December 2024, Bitcoin’s market capitalization exceeded $2 trillion when its price surpassed $100,000 for the first time. Since the highs of 5th December, Bitcoin’s price fell by 7.8% which puts its market capitalization at approximately $1.9 trillion. Bitcoin’s market capitalization is truly astonishing since the value of the entire crypto market was $2 trillion in 2021.
Despite the emergence of other cryptocurrencies such as Ethereum and Tether and other crypto assets like non-fungible tokens (NFTs), more than half of the global crypto asset value comes from Bitcoin’s market capitalization.
We can calculate Bitcoin’s market capitalization based on the following formula.
Bitcoin market capitalization = Bitcoin price × Number of bitcoins
Currently, there are about 19.9 million bitcoins in existence. New bitcoins are created every 10 minutes, and a maximum of 21 million bitcoins can exist. Experts believe that at the current rate, the number of bitcoins will reach its upper limit by 2140.
Bitcoin v/s Stocks
Currently, there are only 10 companies in the world with a market capitalization of over $1 trillion. Only 5 of them have a market capitalization higher than Bitcoin!
Tesla, Broadcom, Taiwan Semiconductor Manufacturing, Berkshire Hathaway, Walmart, and even Meta Platforms have market capitalizations lower than that of Bitcoin.
Let us see where Bitcoin ranks among the most valuable companies in the world.
| Rank | Asset | Industry | Country | Market Capitalization (in billions) |
|---|---|---|---|---|
| 1 | Apple Inc | Consumer Electronics | USA | $3,915.30 |
| 2 | NVIDIA Corp | Semiconductors | USA | $3,426.89 |
| 3 | Microsoft Corporation | Software - Infrastructure | USA | $3,257.30 |
| 4 | Alphabet Inc | Internet Content & Information | USA | $2,402.64 |
| 5 | Amazon.com Inc | Internet Retail | USA | $2,387.43 |
| 6 | Bitcoin | Cryptocurrency | N.A. | $1,900.95 |
| 7 | Meta Platforms Inc | Internet Content & Information | USA | $1,522.86 |
| 8 | Tesla Inc | Auto Manufacturers | USA | $1,457.78 |
| 9 | Broadcom Inc | Semiconductors | USA | $1,150.09 |
| 10 | Taiwan Semiconductor Manufacturing ADR | Semiconductors | Taiwan | $1,053.05 |
| 11 | Berkshire Hathaway Inc | Insurance - Diversified | USA | $989.40 |
| 12 | Lilly(Eli) & Co | Drug Manufacturers - General | USA | $753.89 |
| 13 | Walmart Inc | Discount Stores | USA | $745.42 |
| 14 | JPMorgan Chase & Co | Banks - Diversified | USA | $684.52 |
| 15 | Visa Inc | Credit Services | USA | $629.32 |
| 16 | Mastercard Incorporated | Credit Services | USA | $492.10 |
| 17 | Oracle Corp | Software - Infrastructure | USA | $480.18 |
| 18 | Unitedhealth Group Inc | Healthcare Plans | USA | $470.40 |
| 19 | Exxon Mobil Corp | Oil & Gas Integrated | USA | $468.03 |
| 20 | Costco Wholesale Corp | Discount Stores | USA | $424.43 |
Bitcoin v/s Bonds
Although we are now comparing entire bond markets to a single asset, bitcoin still ranks quite high. According to SIFMA’s Capital Market Factbook, the global bond market was worth $140.7 trillion by the end of 2023.
As per 2024 Q2 data, the United States is the largest bond market in the world valued at $56.38 trillion followed by China’s bond market which was worth $23.54 trillion. However, you can think of the United States and China as outliers. Of all the countries that reported their total debt securities, only 13 had a bond market size of at least $2 trillion.
Let us see how Bitcoin ranks against bond markets.
| Rank | Countries | Bond market size |
|---|---|---|
| 1 | United States | $56,376.82 |
| 2 | China | $23,535.93 |
| 3 | Japan | $10,315.04 |
| 4 | France | $6,236.12 |
| 5 | United Kingdom | $5,970.15 |
| 6 | Germany | $4,561.52 |
| 7 | Canada | $4,283.36 |
| 8 | Italy | $3,653.55 |
| 9 | Brazil | $2,923.06 |
| 10 | Korea | $2,574.87 |
| 11 | Australia | $2,439.79 |
| 12 | Netherlands | $2,372.47 |
| 13 | Spain | $2,370.74 |
| 14 | Bitcoin | $1,900.95 |
| 15 | Mexico | $1,180.43 |
| 16 | Ireland | $1,121.84 |
| 17 | Belgium | $939.16 |
| 18 | Luxembourg | $925.28 |
| 19 | Sweden | $859.20 |
| 20 | Switzerland | $823.56 |
Note: This is not an exhaustive list as national authorities of countries such as the Cayman Islands, India, and Russia have not reported total debt securities.
Bitcoin v/s Gold and other precious metals
If we pit Bitcoin against precious metals in terms of market capitalization, it will come out second best to gold. In November 2024, bitcoin leapfrogged silver to become the 8th largest asset in the world. However, given that gold’s market capitalization stands at approximately $18 trillion, it may take Bitcoin a few years before it can overtake gold.
Currently, experts expect Bitcoin to reach a market capitalization of $20 trillion by 2030. If gold prices stagnate, we could see bitcoin overtake gold in our lifetimes.
| Rank | Precious metals | Market capitalization (in billions) |
|---|---|---|
| 1 | Gold | $17,998.62 |
| 2 | Bitcoin | $1,900.95 |
| 3 | Silver | $1,752.00 |
| 4 | Platinum | $302.30 |
What is causing the rise in bitcoin’s price?
Bitcoin was created as an alternative, decentralized currency in response to the Great Recession, which was largely seen as a failure of the banking system. In its early form, the rise in Bitcoin’s price was fueled by a growing distrust of banks and financial institutions. However, in its current form, bitcoins and other crypto assets are regulated by various government bodies worldwide. Hence, we can no longer attribute Bitcoin’s growth to a growing distrust of banking systems.
This suggests that Bitcoin’s value comes from its ability to facilitate transactions and as an investment avenue.
While cryptocurrencies are rarely used for day-to-day transactions, they are being used to make cross-border transactions. In many developing countries, there are large populations working abroad that need to transfer remittances swiftly and at low costs. We can observe this trend in Venezuela, a country whose currency has been plagued by loss of value due to high inflation.
While cryptocurrencies like Bitcoin prove handy in such scenarios, this alone cannot explain the growth Bitcoin has enjoyed.
We must also note that the momentum generated in its early days positioned Bitcoins as an investment avenue. Hence, a great deal of speculation may also be built into the cryptocurrency’s price. In recent years, investing in Bitcoins has become even more accessible with Bitcoin exchange-traded funds (ETFs), further fueling the trend. While Bitcoin futures ETFs have been trading on CBOE since 2021, Bitcoin spot ETFs were approved by the Securities and Exchange Commission (SEC) in 2024.
Eqvista- Empowering Decisions By Demystifying Valuations!
Currently, Bitcoin’s market capitalization is surpassed by only five companies in the world which are Alphabet (Google), Apple, NVIDIA, Microsoft, and Amazon. Astonishingly, Bitcoin holds its own even when compared to bond markets as only 13 of them have a greater market size than Bitcoin’s market capitalization. While Bitcoin has overtaken silver and platinum, it may be a few years before it can overtake gold, the largest asset by market capitalization.
As a larger section of the population starts adopting Bitcoins for day-to-day transactions and cross-border transfers, we may see further spikes in Bitcoin’s price. However, given that speculation is the main driving force behind Bitcoin’s growth, its volatility is likely to persist.
If you are someone looking for expert valuation insights on niche assets such as cryptocurrencies and private equity, consider taking a look at some of our other articles:
