It has just been over a decade since bitcoin came to the global financial scene and it has already become the 11th largest money supply of the world, that too without any CEO. Standing against several decades-old currencies, bitcoin has crossed the money supply of some big countries such as Canada, Australia, Brazil, and South Korea.
Crypto trader going by the name of Rhythm recently pointed this fact out in his tweet saying:
Bitcoin is now the 11th largest money in the world, and it obtained this with only a nine-page paper created anonymously fueled by a grassroots movement.
Millions of people have choosen a bank with no CEO, office or marketing department and it should absolutely blow your mind. pic.twitter.com/I8Mgv2fRjJ
— Rhythm (@Rhythmtrader) August 7, 2019
Besides being close to coming in the top 10, bitcoin currently ranks as the 27th largest company of the world with a market capitalization of around $212 billion. But there is still a long way to go for this alternative to the centuries-old banking system. Microsoft, Apple, Facebook, Google still hold market caps in 500+ billion and when it comes to Amazon, over a trillion dollars.
At the time of writing, bitcoin is currently showing bull-run trend, priced at around $11,903 while showing a 1.82% increase in the past 24 hours alone. Although bitcoin has been able to establish its image as a store of value, it still is very far behind gold in terms of its market cap.
While bitcoin’s market capitalization is in billions, gold holds a mammoth total cap of over $8 trillion. While for silver, the market cap value is around $800 billion. Despite being relatively low in market caps, bitcoin has been able to grow much faster than other assets.
Bitcoin is a technological innovation whose whitepaper was published by an anonymous entity and presents the world with an entire internet-based financial framework. When it comes to gold and banks, they have been around for centuries. Gold has been in usage as a store of value since ancient times.
The fact that bitcoin is even starting to rival the centuries-old system with its decentralized online system, is a testament to its game-changing aspects that come with blockchain technology. The ease of usage, cheap transfer of value to others across the world, much faster than the local banks, transparency, and trustlessness are some of the factors that make bitcoin stand out. The digital asset has progressed so much in past 10 years that it is even termed as the “digital gold” by some of its staunch proponents.
As said by Tuur Demeester, the founder of Adamant Capital:
As the case with gold, part of the global population has also accepted bitcoin as the new digital gold, the new standard to weigh in a financial value against.
Shortcomings in the traditional financial framework of the world is also a factor that pushes bitcoin proponents to propel this asset’s global importance. Since banks are centralized, policies and decisions made by centralized controlling parties have to be accepted by the users. As the Bank of England denied to give Venezuela its gold back earlier this year, here’s what the founder of Morgan Creek Digital and staunch bitcoin bull, Anthony Pompliano said:
Venezuela’s request to withdraw its own gold of worth $1.2 billion from the Bank of England getting denied is the reason we should turn to bitcoin and the crypto system of financial transaction. This is another down for the Bankers and the banking system not letting the individuals to access their wealth.
In the past 10 years, bitcoin has climbed up the ladder of growth much faster than other assets. Although the initial use-case of bitcoin and the broader crypto world was largely driven by illegal usage, increased adoption has also highlighted the positive use of such currencies.
Seeing the promise put forth by the technology lying underneath, blockchain, even Facebook has decided to launch its very own cryptocurrency Libra. In the past few years specifically, bitcoin has progressed on both technological and regulatory ends at a rapid pace. The bull-run of 2017 put bitcoin on the global financial scene and a huge amount of intellectual capital and money is flowing into its space for the past couple of years.
The hash rate of the bitcoin network also touched an all-time high recently, whereas the network is settling around $3 billion of transactions daily. Starting with a negative vibe, the ecosystem has now become much healthier.
Although bitcoin has still not gotten rid of its problems like scalability, regulatory clarity, and prevalence of illegal activities, increase investor number and regulatory attention is expected to make this ecosystem better moving ahead. If all goes well, bitcoin is set to disrupt the global financial structure and it will only increase the global currency competition with Facebook coming in to play with its Libra, as next 5-10 years are expected to be significant for bitcoin. It will be interesting to see how this tech innovation challenges the USD and gold on the global level with all the promises that it brings.