A Comment -- General Comments From an Expert (A Commentary)

WEIGHT OF THE CRYPTOCURRENCY ECOSYSTEM

In the last article, we saw that the market cap of crypto-currencies was around $3 trillion. The question of a speculative bubble or a real paradigm shift is on everyone's lips.

While it is always important to handle them with care, statistics can always give us clues that we need to dig deeper.

There is over $1 quadrillion in the world. The global equities market represents about $90 trillion, the precious metals market such as gold and silver represents $12 trillion. The world's total M2 money supply (physical money, deposits, etc...) is $40 trillion and global real estate accounts for $30 trillion. Including other forms of investment, global debt, and the derivatives market, we get a total of $1 quadrillion, or $1,000,000,000,000,000.

A quick calculation immediately reveals that the crypto-currency market represents 0.3% of all wealth in existence. It is also 4 times smaller than the precious metals market, and 30 times smaller than the global equities market.

We can therefore think that, even if there is a bubble (a lot of behavior leads us to think that there is an abusive speculation on the part of many investors), there is also, on the long term, a place to take for crypto-currencies which are increasingly adopted, have already proven themselves and are increasingly valued by people to fight inflation and have easy access to means of payment thanks to the DeFi.

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Rates may go up soon. For the time being, investors could reduce very expensive growth stock exposure, and reduce high income dividends that have no growth. Short duration bonds should be the only type kept and be cautious of commodity exposure. Unlock Premium - Try 5i Free