The Crypto Investment Landscape: How Much Money Is Involved?

Cryptocurrency is a digital currency, such as Bitcoin, that is used as an alternative payment method or speculative investment. Cryptocurrencies get their name from the cryptographic techniques that let people spend them securely without the need for a central government or bank. The value of all existing cryptocurrency is around $2.02 trillion, with around $1.14 trillion of that being attributed to Bitcoin (as of September 4, 2024). The total value of all cryptocurrencies combined is roughly $2.6 trillion (as of April 10, 2024).

Bitcoin's value: $1.39 trillion as of April 10, 2024

Bitcoin is a cryptocurrency, one of the thousands of new digital or virtual currencies available globally. It can be used as a store of value, a way to exchange value, or as a speculative investment. Its value changes daily, sometimes by hundreds of dollars or more, which also changes how much global capital is invested in it.

On April 10, 2024, the value of a single bitcoin was $70,665, with more than 19.68 million bitcoins in circulation, giving it a total value of over $1.39 trillion. This is a significant jump from the previous year, when there were about 19.35 million bitcoins circulating with a $472 billion market cap.

Bitcoin is the largest and best-known cryptocurrency in the global economy. If we combine Bitcoin with other cryptocurrencies like Litecoin, Monero, and Ethereum, the total value comes to roughly $2.6 trillion as of April 10, 2024. That was about 0.56% of the value of all money.

Bitcoin and other cryptocurrencies are highly volatile, illiquid, and vulnerable to slippage and price manipulation. Before investing, it is important to understand the risks associated with virtual assets.

All cryptocurrencies' value: $2.6 trillion as of April 10, 2024

As of April 10, 2024, the value of all cryptocurrencies combined was estimated to be around $2.6 trillion. This figure includes the value of Bitcoin, which on that date was valued at over $1.39 trillion, as well as other major cryptocurrencies such as Ethereum and Tether.

The value of all cryptocurrencies has seen significant growth over the years, with the global market capitalisation estimated at $1.09 trillion as of August 2023 and $1.65 trillion as of February 2024. The crypto market is highly volatile and subject to rapid changes, but it has nonetheless shown consistent growth.

Bitcoin, being the first and most well-known cryptocurrency, often referred to as "digital gold", comprises a significant portion of the overall cryptocurrency market cap. On April 10, 2024, the price of one bitcoin was over $70,000, with more than 19.68 million bitcoins in circulation. This gave Bitcoin a total value of over $1.39 trillion, or about 0.3% of the world's money.

While the maximum number of bitcoins in circulation is limited to 21 million, other cryptocurrencies like Ethereum have an unlimited supply. As of September 4, 2024, the value of all existing cryptocurrency was around $2.02 trillion, with Bitcoin accounting for around $1.14 trillion of that figure, according to CoinMarketCap.com.

Despite the high volatility and risks associated with cryptocurrencies, they have gained widespread adoption, with nearly 300 million people worldwide owning some form of cryptocurrency as of 2021.

Crypto market cap: $1.65 trillion as of February 2024

As of February 2024, the crypto market cap was estimated to be $1.65 trillion. This figure represents the total value of all cryptocurrencies in circulation, calculated by multiplying the total number of coins by their current market price. Market capitalisation is a crucial metric in determining the valuation of a cryptocurrency, providing insights into its growth potential and whether it is overvalued.

The crypto market has witnessed significant expansion, with a global market cap of $2.15 trillion in September 2024, reflecting a 3.44% increase over a single day. This growth underscores the increasing adoption and investment in cryptocurrencies. Bitcoin, the most dominant cryptocurrency, accounted for 57% of the total crypto market cap in September 2024, while Ethereum held a 13.6% share.

The total value of all Bitcoin, the largest and most well-known cryptocurrency, was approximately $1.39 trillion as of April 10, 2024. This amount represented about 0.3% of the world's money and 7.6% of the value of all above-ground gold reserves.

The crypto market's volatility and dynamic nature make it challenging to predict its exact value at any given time. Various factors, including market demand, regulatory changes, technological advancements, and the global economic landscape, influence the market cap.

As of September 2024, the global cryptocurrency market cap stands at $2.26 trillion, showcasing the continued growth and interest in this asset class.

Bitcoin's market share: 48.6% as of February 2, 2024

As of February 2, 2024, Bitcoin constituted 48.6% of the total value of the cryptocurrency market. This market share is significant, considering the existence of over 21,000 different cryptocurrencies since Bitcoin's inception in 2009.

Bitcoin's market share and overall value have experienced substantial fluctuations. In April 2024, the combined value of all bitcoins was approximately $1.39 trillion, with a single bitcoin worth over $70,000. This represented a stark increase from the previous year, when the market cap was $472 billion with a bitcoin value of around $24,000.

Bitcoin's market dominance has also been challenged by the emergence of other cryptocurrencies, such as Ethereum and Tether, which occupy the second and third positions in terms of market value. Additionally, the highly volatile nature of cryptocurrencies, influenced by factors like regulatory changes and technological advancements, further contributes to fluctuations in market share.

Despite the competition and volatility, Bitcoin has maintained its position as the most valuable coin in circulation. Its longevity, brand recognition, and status as the first cryptocurrency have contributed to its enduring market dominance.

Crypto volatility: a major reason for its poor performance as a currency

The value of all cryptocurrencies combined is estimated to be around $2 trillion as of April 2024, with Bitcoin accounting for about $1.4 trillion of that figure. This represents about 0.56% of the world's money. However, the extreme volatility of cryptocurrencies, especially compared to mainstream markets, has been a major reason for their poor performance as a currency.

Volatility in financial markets refers to changes in the price of an asset, which can be steady or sudden. While healthy volatility is normal and creates opportunities for profit, extreme volatility is often associated with market chaos, uncertainty, and loss. Crypto markets exhibit extreme volatility, with skyrocketing peaks and depressive troughs occurring at a much quicker and more extreme pace than prices of assets in mainstream markets. For example, the price of Bitcoin rose by 125% in 2016, and then again by more than 2000% in 2017. This volatility is fuelled by news developments and speculation, which have a more exaggerated effect on crypto markets due to their lack of liquidity and a robust ecosystem of institutional investors and large trading firms.

The high volatility of cryptocurrencies makes them difficult, if not impossible, to use as currencies. For a currency to function effectively as a medium of exchange, it needs to be mostly stable. The extreme volatility of crypto assets is a significant barrier to their adoption by investors, as demonstrated by a survey by Fidelity among institutional investors.

While there are signs that crypto volatility is improving as institutional investors and trading firms enter the market, it is still a long way from reaching the stability required to function effectively as a widely used currency.

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