The market capitalization of Bitcoin reached around $280 billion recently – a sharp increase from about the $190 billion valuations that the cryptocurrency has had in recent months, surpassing top US companies in the likes of PayPal, Coca-Cola, Netflix, and Disney.
About two months ago, when the price of Bitcoin was around $10,000, the market capitalization of Bitcoin stood at $190 billion. However, just this month, Bitcoin surged $15,000 to reach a whopping market capitalization of $280 billion, reminding analysts of the all-time increase in Dec 2017, when the price of the cryptocurrency reached an all-time high of $19,783.06. This current market cap makes Bitcoin more valuable than most iconic US companies.
If Bitcoin were a publicly-traded company in the US, it would match the 18th company, displacing the likes of Netflix, PayPal, BofA, Coca-Cola, Salesforce, and Disney. However, Bitcoin is still behind top financial institutions in the US by valuation, such as Visa, Mastercard, and JPMorgan, whose market cap is valued at $422.6 billion, $312.7, and $313.8, respectively. To surpass all three, Bitcoin would need to achieve $23,000, equivalent to a market cap of $426 billion.
Apple remains the most valuable in the US, with a market cap of $2 trillion. For Bitcoin to achieve this honor, it must hit around $120K.
With Bitcoin becoming more valuable and with analysts and experts predicting record-high in the coming months, hedge fund managers around the world have acknowledged the cryptocurrency as a durable store of value.
Renowned Fund Manager Bill Miller said that all major banks, investment banks, and high net worth firms would eventually adopt bitcoin since the cryptocurrency has proved its staying power ever since its emergence.
Bitcoin has become a legal tender in the US, Japan, the UK, Canada, and most other developed countries. However, in the emerging markets, the legal status of the cryptocurrency varies. China has restricted Bitcoin without actually making transactions with the digital currency a crime. India has banned its banks from dealing in Bitcoin, and the legal status of the currency remains ambiguous within the country.
Notwithstanding, reputable companies in the US and elsewhere are investing in the digital currency. Microstrategy invested $425 million in Bitcoin. PayPal, on its part, endorsed the digital currency by launching a cryptocurrency service.
Bill Miller spoke with CNBC, where he predicted the recognition of the currency by top financial institutions in the future.
“I think every major bank, every major investment bank, every major high net worth firm is going to eventually have some exposure to bitcoin or what’s like it,” Miller said.
Miller, a famed investor, founded the Miller Value Partners and currently serves as its chairman and chief investment officer. He had previously co-founded Legg Mason Capital Management and co-managed the Legg Mason Capital Management Value Trust right from its inception in 1982.
Miller acknowledged the volatility of Bitcoin but said the cryptocurrency has been able to achieve a staying power despite the steep fluctuations in its value over the years. He listed the cryptocurrency as the single best performing asset class in the last ten years.
Miller supported his claims by saying that Bitcoin’s supply has been growing at 2.5% a year, with its demand exceeding supply by far. He concluded his analysis by urging more people to key into Bitcoin, especially at its current price. Miller revealed in December 2017 that his firm had invested about 50% in Bitcoin.
Other hedge fund managers have realized the huge financial wisdom in investing in bitcoin also. Paul Tudor Jones, a billionaire Wall Street hedge fund manager, called Bitcoin an ideal inflation play. He revealed that he had invested about 2% of his portfolio in the cryptocurrency.