Bitcoin

Why Bitcoin’s market capitalization hit a new all-time high before price

The last leg of the recent Bitcoin (BTC) rally Its market capitalization topped $ 330 billion for the first time. In late November, the price rose above $ 17,750.

According to CoinGecko Bitcoin capitalization’s previous high of $ 329.3 billion was recorded on December 16, 2017. In the middle of the historic bull cycle, Bitcoin’s price hit $ 20,000.

BTC market capitalization since 2017. Source: CoinGecko

However, the new maximum in market capitalization came despite the fact that the price of BTC has not hit new highs.

Why Bitcoin’s market capitalization hit a new all-time high before price
Why Bitcoin’s market capitalization hit a new all-time high before price

There is a very simple explanation for this: the growing supply of Bitcoin. While As of December 16, 2017, there were approximately 16,746 million Bitcoin, since then more than 1.8 million coins have been mined, representing a 10.75% increase in supply. This means that Bitcoin can have a higher market cap even though the price is currently lower.

The combined capitalization of all cryptocurrencies also exceeded $ 500 billion for the first time since February 2018.

Combined capitalization of all crypto assets since 2017. Source: CoinGecko

According to him World Bank, Bitcoin’s market capitalization exceeds that of publicly traded companies based in countries like Belgium, Iran, Norway, Sweden and the Philippines, and is more than double that of companies in Denmark, Qatar, Vietnam and Colombia and Poland.

Compared to companies appearing on the SP 500, Bitcoin’s market cap is around $ 13 billion behind Procter and Gamble’s eleventh position and above Nvidia and JP Morgan. However, some would argue that comparing Bitcoin to companies is not very illuminating and that it should be compared to commodities or any other asset class.

Despite the market cap milestone, some analysts point to a lack of media coverage of recent Bitcoin gains.

According to data from LunarCRUSH, Bitcoin-related news volume, a company that tracks cryptocurrency sentiment on social media, has seen a sharp surge since early November.

The company sent a tweet graphic It showed that the volume of daily media coverage in connection with Bitcoin has multiplied by five in the past two weeks.

according to Google Trends, The search volume of the keyword “Bitcoin” in November is approx. 15% of the search maximum of 2017, Further evidence of the relatively low level of retail interest in BTC compared to the last time the market hit parabolic highs.

Relative search volume for the word “Bitcoin” over the past five years. Source: Google Trends

In fact, the search volume is only at the fourth highest level of 2020, They fell behind the peaks of interest that coincided with the Black Thursday crash in March, Bitcoin halved in May, and BTC broke above $ 10,000 in May.

Similar Posts