With the market value of bitcoin reaching $ 1 trillion, many have questioned whether bitcoin has become a bubble or whether there is still room for growth in this digital currency.
to the Report The Bitcoin Telegraph’s market value exceeded $ 1 trillion for the first time on February 19. Although this was exciting for investors, it also raised concerns that the asset might be caught in a bubble.
Although a handful of companies have had this success [ارزش بازار یک تریلیون دلاری] They have achieved, but the stock market is potentially generating revenue. This income can be used to repurchase shares, divide profits or develop additional sources of income. However, gold, silver and bitcoin do not have this feature.
On the other hand, as bitcoin acceptance increases, these same companies are likely to be forced to transfer some of their cash positions to non-inflationary assets, which guarantees demand for gold, silver and bitcoin.
In fact, the data show that the diversification between bitcoin and traditional assets presents investors with better adjusted risk, which is increasingly difficult for companies to ignore.
The market value of bitcoin is still above the $ 1 trillion mark, and the importance of this is easily overlooked; Unless we compare the market value of Bitcoin with other prominent global assets. To date, less than 10 tradable assets have achieved such success.
As can be seen in the table above, the world’s 44 most profitable companies earn more than $ 1 trillion a year. Some may say that shareholders are likely to reinvest their dividends in the stock market, but it is also possible that part of it will flow to bitcoin.
One trillion dollars is small compared to the real estate market
Corporate revenue is not the only thing that can be diverted to scarce digital assets. Some analysts estimate that some of the investment in real estate will eventually shift to riskier assets, such as bitcoin. This is especially true for assets that have lower returns on inflation.
On the other hand, people who have profitable assets in the field of real estate may want to diversify their investment portfolio. Given the relatively scarce assets available, the stock market, commodities and bitcoins are likely to benefit from this diversification.
According to the chart above, real estate in the agricultural sector worldwide is valued at $ 27 trillion. The US Department of Agriculture estimates that by 2020, agricultural returns were 4.2 percent. Of course, this data is very crude, and given that real estate in the agricultural sector has many uses, it is quite possible that this sector will generate more than a trillion dollars a year in revenue.
There are 51.9 million people in the world with a net worth of $ 1 million or more, excluding debt. Although they represent only one percent of the world’s adult population, they have a total wealth of $ 173.3 trillion. Even if they do not want to sell their assets and convert them to bitcoin, a small annual return of 0.6 percent is enough to generate $ 1 trillion in revenue.
If there is a bubble, bitcoin is not alone
These figures confirm that the $ 1 trillion market value of bitcoin should not be taken immediately by the same bubble.
Perhaps the maximalist argument of Bitcoin is correct, and global assets have become very inflated due to the lack of scarce and secure options for storing wealth. In this case, which is not very obvious, the devaluation of assets on a global scale certainly limits the upward potential of Bitcoin. Unless maximalists somehow think that a digital currency can be considered a measure of global wealth, which seems strange.
Realistically, comparisons with stocks, real estate in agriculture, and global wealth confirm how small Ethereum’s $ 244 billion market value is currently. Needless to say, the $ 610 million market value of Altcoins seems insignificant.
It is unlikely that any portion of corporate profits and real estate returns will go to digital currencies. At the same time, the $ 100 billion annual inflow to Bitcoin alone is five times the value of newly issued coins each year, which, valued at $ 59,500, equals $ 20.3 billion.
For example, if $ 100 billion is invested in bitcoin, it is only 5 percent of the $ 1 trillion in corporate dividends per year and 5 percent of global wealth or agricultural real estate returns. Even if the impact on the $ 11 trillion gold market value is considered a form of negligence, allocating these small percentages each year plays a vital role in turning Bitcoin into a multibillion-dollar asset.