Bitcoin Grows Up

gold-colored Bitcoin

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Bitcoin (BITCOMP) has gone from JV to Varsity, and now has a valuation as high as some of the world’s top companies. Turning 12 years old, the digital cryptocurrency is growing up, figuratively and literally, right in front of our eyes.

The price of Bitcoin has seen nothing short of a meteoric rise recently and over time. In March of last year, it traded as low as $3900 per Bitcoin. As of this writing, the price of Bitcoin is around $60,000. This isn’t the first time in Bitcoin’s history we’ve seen a massive increase. For example, from roughly December 2016 to December 2017, the price of Bitcoin went from roughly $700 to over $19,000.

But Bitcoin is still an adolescent asset, exhibiting some growing pains. Like turning 13 or getting your first real job, there are important maturity events taking place superficially and beneath the surface.

  1. Bitcoin price: $60,000 per coin.
  2. Bitcoin market cap: $1 trillion.

Big round numbers and price levels are mostly meaningless, until they are not. Bitcoin crossed $60,000 a Bitcoin recently. This is not really meaningful, just like Dow 30,000 isn’t meaningful, but it creates an anchor in people’s minds as the figures gets broadcast from the rooftops of business news networks, social media platforms, around the dinner table, and in institutional circles.

Bitcoin reaching $1 trillion in market cap is more meaningful, however, as it allows us to gauge the current market value of Bitcoin relative to the value of other assets. In the U.S. stock market, only a handful of the most valuable companies are worth more than $1 trillion, and the rise of Bitcoin continues to make it a larger percentage of the addressable gold market (around $11 trillion).

Bitcoin Adoption

While most of the Bitcoin owned is by individuals, there are some important developments worth paying attention to in the institutional space.

The first is that a handful of companies, including Tesla (TSLA), have decided to hold Bitcoin on their balance sheets instead of U.S. Treasuries. While a very small number of companies have allocated to Bitcoin, progressive companies like Square (SQ), Tesla, and MicroStrategy (MSTR) are early supporters of holding Bitcoin as an asset on the balance sheet.

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