The sentiment around Bitcoin (BTC) has become noticeably positive after the breakout above $12,000 in August. If this momentum continuously strengthens over the medium term and BTC hits $16,500, it would equal JPMorgan’s market cap.
Earlier today MMCrypto, an on-chain analysis firm, outlined major financial and tech conglomerates’ valuations relative to BTC’s potential price. At the following price points, Bitcoin would equal the market caps of the respective companies:
BTC market cap share of top companies at various prices. Source: Twitter
If Bitcoin price were to reach $18,324 it could mirror Mastercard’s market cap if it reached $20,182 it would rival Tesla’s market cap.
For Bitcoin, $16,500 is significant because of a CME gap at this level. CME gaps emerge when Bitcoin’s price moves below or above the price last seen on the CME market before it closes.
Since the CME Bitcoin futures market closes during the weekends, it often causes gaps between CME and the rest of the cryptocurrency market to emerge. The two gaps currently open are found at $9,650 and $16,500.
BTC/USD monthly chart. Source: TradingView.com
Market cap comparisons with companies show early phase of Bitcoin growth
Bitcoin is a peer-to-peer currency that is typically considered to be digital gold. Since it does not have dividends, revenues, and other characteristics of a company, it cannot be directly compared to conglomerates, but the comparisons show just how early Bitcoin is in its growth phase.
The asset that comes closest to Bitcoin in terms of characteristics is gold. Recently, billionaire investor and Gemini exchange co-founder, Tyler Winklevoss, wrote a research report stating that BTC is like gold but an order of magnitude better.
Winkelvoss said Bitcoin is better at being gold in portability and has a fixed supply capped at 21 million. Meanwhile, the supply of gold could continue to expand if new sources of the precious metal are found. He explained:
“As it turns out, bitcoin is better at being gold than gold — and not just incrementally, but by an order of magnitude or 10X better. It is a widely held belief in technology circles that when a product is 10X better than its closest substitute, it will escape its competition. We believe Bitcoin has achieved this.”
The supply curve of Bitcoin. Source: Winklevoss Capital
Despite the immense amount of trading activity, computing power, and infrastructure supporting Bitcoin, its market cap remains at around $198 billion.
The entire crypto market cap is smaller than Tesla’s
Analysts often draw comparisons between Bitcoin and Tesla because of the retail demand for both assets.
According to TradingView, Tesla and Bitcoin were the most viewed assets in the U.S. throughout July. The firm said:
“Tesla stock is the most viewed asset in America. Our data shows that throughout July, Tesla was the most viewed stock in 31 states. Bitcoin was not far behind. Since the start of the year, Tesla’s stock has almost tripled in price. Meanwhile, Bitcoin is up 60% year-to-date.”
Tesla is the most dominant company in the electric car market, but Bitcoin is the frontrunner of an entirely new asset class.
Tesla market cap vs BTC market cap. Source: TradingView
Currently, the market cap of the entire cryptocurrency market is smaller than the market cap of Tesla but as demand for Bitcoin increases and the decentralized finance sector grows this imbalance could begin to change.