Just Some Perspective: Underestimating The Growth of Crypto Currencies

About 4 months ago I wrote a perspective article about how far the cryptocurrency marketplace has developed using the overall cryptocurrency market cap as a metric.

TLDR:

At that time (September 2017), the market cap for the cryptocurrency space was right around 160-170 Billion. This put the value of the entire crypto space comparable to a single fortune 500 company. Intel, Unilever, Cisco, and Walt Disney have market capitalizations around this range.

Now, during this time, @taskmaster4450 commented “I think we see a $250B market cap before the end of the year. ...There is just so much money flowing into the space that I cannot see it doing anything but growing."

Well… was he right? Fast forward to today and let’s see where we are. And full disclosure… I also thought we’d be at the 200-250B range.

At the time of writing this, the overall cryptocurrency market cap has shot up to an astounding $630 billion driven by huge rallies in the top 10 coins and every alt coin. This places the entire crypto space at a valuation greater than just about every publicly listed company, save for three.

Market Capitalizations of the top three publicly traded companies:

Apple (APPL) - $873 Billion
Alphabet (GOOGL) - $715 Billion
Microsoft (MSFT) - $640 Billion

What are the other companies the cryptocurrency space now exceeds in terms of value?

Amazon (AMZN) - $531 Billion
Facebook (FB) - $523 Billion
Alibaba (BABA) - $470 Billion
Berkshire Hathaway (BRK-A) - $462 Billion

What’s interesting to note is that within a year, the realm of cryptocurrencies has grown from being a blip on the public radar to having a frequent presence on CNBC, WSJ, and Yahoo Finance. I think the gross underestimation in crypto growth is important to internalize because it forces a moment of pause for observers of the market, current, and prospective investors. When something grows so dramatically, it’s important to zoom out of the chart to see how far your investment as come AND start making realistic assumptions about where we are going in 2018.

Hell, even Vitalik (Founder of Ethereum) doesn’t see the merit in a 0.5 Trillion crypto market cap. We currently are at 6.3 Trilllion.

2018 is right around the corner and I’m confident that it will be a huge year for the cryptospace. Does that mean all coins will succeed? Hell no. Quite the contrary! I believe we’ll be seeing a significant consolidation phase next year where investment in projects that lack a good team, development activity, and pipeline will flow into investment in projects that show great promise. Projects with a solid development team, active user base, and commitment to meeting roadmap goals will shine in 2018 with a nice “culling of the herd” of projects which were too weak or too “scammy” to succeed.

As such, I would caution jumping into new ICO’s and recommend doubling down on some legacy projects for 2018. While 2017 was the catalyst that got this hold thing started, 2018 will be a valuable proving ground to see what sinks and what swims.

Thanks for reading.