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Market cap of Bitcoin is just 2.1% of total market cap of Gold

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bitcoin gold

Market cap of Bitcoin is currently hovering around $180 billion mark which is 2.1% of total market cap of Gold ( $8.3 trillion )

According to many analysts, Bitcoin is digital gold for new generation as they are looking forward to Bitcoin as a commodity and a replacement of Gold, but if we go with numbers, Bitcoin is actually no way near to the market capitalization of total gold in the world, according to an estimate, there is $8.3 trillion worth of gold in the world whereas according to current market cap and price there is only $180 billion worth of bitcoins in the world making it 2.1% of total value of gold in the world.

Gold is still the safe heaven 

Gold is still the safe heaven for major countries and many countries are holding gold as a safe heaven asset for any economic crash or instability, making it the most valuable commodity in the world, if we are talking about bitcoin as digital gold or replacement for gold then potential of bitcoin is massive because if investors started pouring their money in bitcoin just like they did for gold then bitcoin would be a precious commodity with massive price tag.

If Bitcoin captures market cap of Gold 

If bitcoin some day equals market cap of gold then one bitcoin would be worth around $500000

What is stopping Bitcoin to achieve that?

Acceptability, there is no doubt about the fact that Bitcoin is growing its acceptability by the time and many retailers and institutions around the world are now accepting Bitcoin, but its nit easy to use bitcoin in daily life, you just can’t go to a hotel and but food with bitcoin or you just can’t go to auto showroom and buy a new car by paying in Bitcoins, you have to convert Bitcoins in Fiat currency and then buy relevant things, but Imagine if you could buy anything through Bitcoins like you do with Fiat currency what would be the worth of Bitcoin, the answer is it could be worth hundred of thousands of dollars.

Bitcoin is the next super power for sure 

Due to its nature of faster and cheaper transactions, Bitcoin is grabbing attention of many individuals from International Financial markets, recent announcement of CME is a prime example of that, future is looking great for bitcoin and there is no doubt about that fact that if it reaches market cap of Gold, it can reach to $500000 mark

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Australian Taxation Office warned against crypto retirement funds

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Regulatory authorities around the world have tighten the grip on crypto projects. Taxation authorities like Internal Revenue Service (IRS) and Australian Taxation Office (ATO) are the latest to join the list with strong initiatives.

Australian Taxation Office recently sent warning letters to the investors who have invested a large part of their retirement savings in crypto related funds. ATO sent these letters in order to warn investors against high risk investments like crypto. One of the key responsibilities of regulatory authorities and taxation authorities is to keep investors away from high risk investment schemes.

A spokesman from ATO told local media that “We have already seen instances in 2018 where investors lost significant amount of their retirement fund in crypto investments, so it’s our duty to make them aware about the kind of risk crypto market posses”. The spokesman further explained that they are also against the huge exposure in any single asset class. “We are not saying that we are all and all against the crypto market or crypto assets, but we are more concerned about the kind of exposure these crypto retirement funds have in single crypto asset like Bitcoin”

“If an investor is putting more than 90% of his retirement savings in crypto then obviously it is at high risk and that’s what we discourage, we have no issues in diversified portfolios but if crypto retirement funds are having 100% exposure in crypto assets then we have to warn investors about the potential losses.

Self-Managed-Super Funds (SMSFs)

SMSFs are type of retirement accounts privately managed by individuals rather than the institutions or regulated financial companies. Australian Securities and Investments Commission also supports ATO’s decision, in a recent statement ASIC said

“Be wary of services offering to establish an SMSF for you in order to gain exposure to cryptocurrencies. Not only does operating an SMSF involve significant time, skills and responsibility, you may also be putting your retirement savings at risk”

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Morning Crypto Roundup: Coinbase, Bakkt, Binance in news

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“Coinbase seeing $200-400 million in new crypto deposits every week”: Armstrong 

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CEO of Coinbase, Brian Armstrong says that “Adoption of crypto by Institutions is no more an uncertainty. The question was valid about 12 months ago, but now everything has changed as we’re seeing $200-400 million a week in new crypto deposits from institutional clients”

In a recent tweet, Armstrong further says that trust and safety means a lot to crypto investors and Coinbase is on a mission to provide safe infrastructure to institutional clients in order to increase adoption.

Coinbase has completed acquisition of Xapo which helped them in institutional business. In a recent blogpost, Coinbase further mentioned that in just one year of launch, Coinbase custody has reached a staggering number of $7 billion of assets under custody, stored on behalf of 120 clients from 14 different countries.

The highlight of today’s tweet from Brian Armstrong was the numbers from Institutional investors. Safety have always been a big issue for investors and that’s why there were lot of discussions regarding adoption of crypto at Institutional level, but with $200 – 400 million coming into Coinbase every week, we can easily say that crypto adoption at institutional level is no more a question, it’s a reality.

The way forward 

We already discussed about the importance of safety of funds in crypto market, but in order to increase adoption, crypto market must create new traders. Traders love leverage, borrowing and lending which allows them to trade the market even with limited resources. Retail forex market is a prime example of such facilities. Coinbase did mentioned in the blogpost that they are excited to explore new ways to monetize and leverage crypto assets like borrowing and lending.

Bitcoin ETF

Decision about the Bitcoin ETF by securities and exchange commission is pending in October. Exchange traded fund approval from SEC can open new doors for crypto adoption at an institutional level.

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