What limits the market cap of bitcoin?

[ahmad21]

Currently worth $70 Bn, Is this a lot?

Personally it seems quite a lot for a fairly untested currency.

US gold reserves currently worth something like $300Bn, the largest in the world (though it's no clear if anyones checked its there). All this is less than a company like Google but still $70Bn is a lot of money.

For the bitcoin price to rise  a lot of money would have to flow in. Right now it seems like every grandma and her dog is being persuaded onto the bitcoin bandwagon. Is this not a sign of an impending crash, in which those at the bottom of the pyramid get burned? Is the bitcoin rise sustainable? Where will the money be flowing in from? Will shops have to start selling bitcoin investment scratch cards over the counter to keep the price rising?

I'm keen to head from people who can make arguments based on fundamental economic principles, either way.

 

Ones at the bottom of pyramid are always burnt unless a few of them climb them. Yes the economy will shift to bitcoin with an endless market cap. I think only 10% people know about it as of now so it has a great potential to increase.

[astralliam]

We need more users, especially major players in the game.

The fact we know is that there are more millionaries in the world than the number of Bitcoins in existence. Now imagine if at least one-third of these investors decided to buy 1 Bitcoin...

Adoption has stalled - the number of transactions per 24 hours has been about 250,000 for over a year. Though segwit has been enabled, people arn't using it, and fees are still a problem.

I honestly think that if bitcoin doesn't resolve it's problems by the end of this year, a flippening will happen and another coin will take the crown.

This is a good point. Currently the price is inflated because of investors, this means it's a bubble. Unless the adoption starts to rise, sooner or later investor will decide the bull run is over and start dumping bit coin. The price could drop massively.

While bitcoin as an investment tool/store of value itself creates demand, I think transaction volume from real world uses is essential if it's to take off as a currency. Until that happens we're in a bubble IMO, all that's needed is for the holders to decide it's time to sell and the price can go very low.

[clrpod]

The only limiting factor is adoption of the currency, the supply will eventually be fixed and thus the only way market cap can increase is with an increase in demand which in theory is unlimited.

[nkarm1]

It is hard to predict the possible market cap. We have only current cap. But all BTC holders hope that it still can multiply several times.

Well actually it has a limit, and it is the current amount of all assets in this world. And bitcoin won't likely be reaching that idealistically  , because thae wealth would be a thousands larger or maybe more from the cap of btc today.   So don't waste your emotions about predictions on its market cap because this is not an ICO, bitcoin is a real thing and a soon to be the next highest reserves in this world. The cap right now is just a dust from the wealth of this world, so why wouldn't you hope for more multiplied market cap right?

[astralliam]

The only limiting factor is adoption of the currency, the supply will eventually be fixed and thus the only way market cap can increase is with an increase in demand which in theory is unlimited.

In the end the 'price' is a purely psychological value in the market. The price at which there are both sellers and buyers. If all holder decided they would not sell for less than $10k, assuming there were still buyers then that would instantly be the price, no fundementals changed in the economy but the market cap of bitcoin just trippled.

[shield132]

Let's wait and see how much bitcoin will be mined in next years and how it will rise, you will see also how that 70 will be changed to 120 and more. Nothing limits it, everything depends on current number of bitcoin and it's price of each one. But also I want to mention and there are some lost coins, freezed wallet (many btc but lost key so it's like freezed). But as time goes and it becomes more popular + halvings, market cup is rising too because of bitcoin's price rising.

[soham]

Currently worth $70 Bn, Is this a lot?

Personally it seems quite a lot for a fairly untested currency.

US gold reserves currently worth something like $300Bn, the largest in the world (though it's no clear if anyones checked its there). All this is less than a company like Google but still $70Bn is a lot of money.

For the bitcoin price to rise  a lot of money would have to flow in. Right now it seems like every grandma and her dog is being persuaded onto the bitcoin bandwagon. Is this not a sign of an impending crash, in which those at the bottom of the pyramid get burned? Is the bitcoin rise sustainable? Where will the money be flowing in from? Will shops have to start selling bitcoin investment scratch cards over the counter to keep the price rising?

I'm keen to head from people who can make arguments based on fundamental economic principles, either way.

I don't think you should compare bitcoin's market cap with the USA gold reserve or with the GDP of any country. Because bitcoin is not a mainstream currency and the legal status of bitcoin is not clear to majority of the countries. However, 70 USD billion is not a small amount, it is way higher than the GDP of many countries, probably the majority of the countries.

But slowly the picture is changing. While China banned ICO (not bitcoin) and Japan issued a license to a crypto currency exchange. We will see a lot more investment coming in to bitcoin is future. A lot of people are getting interested about bitcoin on a daily basis. If more countries start accepting bitcoin, you just can't imagine the kind of money can flow in to the crypto community. I think the main roadblock is the unclear legal status due to which we can't see many institutional investors here. Once it is legalized and institutional investors start investing in bitcoin, it will have a dream run.

[Razick]

The market cap of anything is simply how much money the entire company/organization or entity is. For Bitcoin, simply add up all of the Bitcoins in existence and their current price and you get the market cap. Although, something I just realized is the market cap does not account (or maybe it does?) for lost coins. There are probably a million lost Bitcoins. Maybe not that many, but definitely a lot. That will shrink the market cap as these coins are essentially useless, but are being counted anyways.

[peterthegreat]

What limits the market cap of Bitcoin is the FUD that is created from different media outlets. The people that watch MSM media, which is the avg person, will believe in this crap and not study what Bitcoin really is and why it's not going away.

[d5000]

I have a different view on that subject than most of the posters in this thread.

We have first to ask what are the assets that are "represented" by Bitcoins currently - and that depends heavily on the use cases. If we know that, and take a look on Bitcoin's properties, we can speculate about a future "market cap limit".

That sounds very theoric, but it's not so difficult: Bitcoin is, today, mainly used by people to replace savings accounts, or small amounts of shares by (relative small) speculators. It's also used by companies that offer some financial services like trading and remittances. That Bitcoin is mainly limited to these two sectors is due to its volatility (that makes the risk in most other fields "unmanageable") and high expectations on a future price increase.

So we could add these two use cases (calculate the sum of the "monetary" importance of savings accounts and the market capitalization of real remittances/trading/fintech service companies - NOT the entire banking sector because important items like insurance and loans are currently almost impossible due to Bitcoin's volatility) and we would have a realistic "market cap limit" if Bitcoin conserves the current characteristics.

We can speculate that in the future volatility will be lower, and scalability issues will be solved, so Bitcoin could be used as a "real currency" and will be much more widely adopted. But even then probably Bitcoin's market cap will be much smaller than the world's GDP, because for some use cases other money forms would be more suitable, and there are also altcoins to consider (in the past months about 50-70% of the total cryptocurrency market cap).

[astralliam]

Currently worth $70 Bn, Is this a lot?

Personally it seems quite a lot for a fairly untested currency.

US gold reserves currently worth something like $300Bn, the largest in the world (though it's no clear if anyones checked its there). All this is less than a company like Google but still $70Bn is a lot of money.

For the bitcoin price to rise  a lot of money would have to flow in. Right now it seems like every grandma and her dog is being persuaded onto the bitcoin bandwagon. Is this not a sign of an impending crash, in which those at the bottom of the pyramid get burned? Is the bitcoin rise sustainable? Where will the money be flowing in from? Will shops have to start selling bitcoin investment scratch cards over the counter to keep the price rising?

I'm keen to head from people who can make arguments based on fundamental economic principles, either way.

 

Theres no limit to the marketcap of bitcoin and you must understand about that will never have a limit. Imagine all of the people around the world are using bitcoin. There is not limit to the price of bitcoin as the stable currency like usdt. bitcoin is possible to growth 10k dollar or even 100k dollar for each bitcoin.

Well the theoretical limit is the amount of wealth everywhere but bitcoin in the world, which is tons of trillions, so yes, Bitcoin is a tiny dot in a sea of potential wealth that can come in in various forms, be precious metals like gold and silver, stocks, bonds, commodities and all kinds of assets. BTC could be worth millions of dollars if people diversified small %'s of each of their holdings on their portfolios into BTC.

This should explain it better than any words (just consider BTC is not 70 billion and not 5, but like you see, it's still nothing, we are early adopters)

https://i2.wp.com/money.visualcapitalist.com/wp-content/uploads/2015/12/all-the-worlds-money-and-markets-dv.png?w=1360

This is a good vis. Makes it clear how small BTC still is and how crazy economics is.
Unlike the number of dollars in circulation, or the number of bitcoins in existence, the actual marketcap of bit coin is not 'real' in the same sense. The price of BTC in dollars can fluctuate arbitrarily based on supply and demand, this could make the market cap of BTC expand or contract by billions, yet no new money was created or necessarily even changed hands.

[Sled]

I don't think that there is no limit for the market cap of bitcoin because its market capitalization is depending on the volume of the whole market and as long as the market is active and the people are keep on buying and selling and there is no hard dumps or panic selling then the market cap of bitcoin will continue to go up and it will not have any limit.

[aardvark15]

Currently worth $70 Bn, Is this a lot?

Personally it seems quite a lot for a fairly untested currency.

US gold reserves currently worth something like $300Bn, the largest in the world (though it's no clear if anyones checked its there). All this is less than a company like Google but still $70Bn is a lot of money.

For the bitcoin price to rise  a lot of money would have to flow in. Right now it seems like every grandma and her dog is being persuaded onto the bitcoin bandwagon. Is this not a sign of an impending crash, in which those at the bottom of the pyramid get burned? Is the bitcoin rise sustainable? Where will the money be flowing in from? Will shops have to start selling bitcoin investment scratch cards over the counter to keep the price rising?

I'm keen to head from people who can make arguments based on fundamental economic principles, either way.

 

The market cap is just a product of supply and demand for Bitcoin. If more people want it at these prices, they'll just keep buying it and the price and maker cap will keep rising. As mining gets harder and Bitcoins get more scarce, the price will keep rising. This is all part of the design of Bitcoin where the supply is limited and after the 21 million are mined, the supply ends. Bitcoin is designed to be deflationary so the value will rise over time while fiat currencies are inflationary as governments print more money.

[Pivo]

As long as the price increases due to demand then the market cap will grow even more. There is no limit actually like as they say. Also there is no need to put an extreme effort to keep the price rising or whatever like giving out cards or some sort since it just happens. It just depends on the markets respond, to the people, to the demand and nothing more.

[boyshx]

Currently worth $70 Bn, Is this a lot?

Personally it seems quite a lot for a fairly untested currency.

US gold reserves currently worth something like $300Bn, the largest in the world (though it's no clear if anyones checked its there). All this is less than a company like Google but still $70Bn is a lot of money.

For the bitcoin price to rise  a lot of money would have to flow in. Right now it seems like every grandma and her dog is being persuaded onto the bitcoin bandwagon. Is this not a sign of an impending crash, in which those at the bottom of the pyramid get burned? Is the bitcoin rise sustainable? Where will the money be flowing in from? Will shops have to start selling bitcoin investment scratch cards over the counter to keep the price rising?

I'm keen to head from people who can make arguments based on fundamental economic principles, either way.

I'm sure there is room for the market cap of bitcoin. As you are saying the gold is worth 300B in just USA market then just imagine how it is worth in the whole world. That's a lot of money and if that can come into gold then I'm pretty sure it can come into all new crypto currency like bitcoin. Gold is being traded since decaded of decades and that's why it has that much supply and investment. Imagine bitcoin reached this much in just a decade so there is still big time for the bitcoin to get into action and make the world dance.

[aoihs00]

The market cap surely can surpass that value in the near future. People are flooding the money into bitcoin day by day as they are getting hold of it. That's where from the money will flow into bitcoin really and it will get its recognition into highly valued market cap. :-)


Yes, there is also big line of merchants who will want to use he bitcoin in the near future when the bitcoin open up the ways of paying and getting paid for the merchant and users. This will increase the use of bitcoin by many folds, they will buy bitcoin for the reason and remember each user will contribute to increase the market cap for sure, the process is slow but the value will be worth.

[TrueCryptonaire]

There is no limit on market cap of bitcoin, the more the investors invest in bitcoins, the more market cap it have. But it increases our decreases due to market manipulation and increases due to a news favouring bitcoin. And considering that the combined market cap of all the cryptocurrencies is equivalent to $150bn and most of the world don't know Much about bitcoins and crypto, so there is huge amount of potential in crypto that is right now untapped and one it goes mainstream then there works be an exponential growth and market cap will reach a $1 trillion mark.

[kimochidesh]

Total Market cap of BTC and Altcoins is about 145 bn dollar. Still, a large percentage of people all around the world are unaware of it. So it got a huge potential and large market to touch. Though the price of BTC and other altcoins are rising, it will give also give a boost to its market cap. ICO's are also attracting investors to invest more in order to earn huge profit in short spam of time.

[YTBitcoin]

Currently worth $70 Bn, Is this a lot?

Personally it seems quite a lot for a fairly untested currency.

US gold reserves currently worth something like $300Bn, the largest in the world (though it's no clear if anyones checked its there). All this is less than a company like Google but still $70Bn is a lot of money.

For the bitcoin price to rise  a lot of money would have to flow in. Right now it seems like every grandma and her dog is being persuaded onto the bitcoin bandwagon. Is this not a sign of an impending crash, in which those at the bottom of the pyramid get burned? Is the bitcoin rise sustainable? Where will the money be flowing in from? Will shops have to start selling bitcoin investment scratch cards over the counter to keep the price rising?

I'm keen to head from people who can make arguments based on fundamental economic principles, either way.

 

Ones at the bottom of pyramid are always burnt unless a few of them climb them. Yes the economy will shift to bitcoin with an endless market cap. I think only 10% people know about it as of now so it has a great potential to increase.

Everyone knows that in coming future economy will be more dependent on bitcoin as compare to flat money that’s why the popularity of bitcoin is touching skies and on other hand many of the governments are now looking forward to bitcoin market systems into their region o that they can make profits and give boost to economy, bitcoin will be the coin of the world soon.

[d5000]

US gold reserves currently worth something like $300Bn, the largest in the world (though it's no clear if anyones checked its there). All this is less than a company like Google but still $70Bn is a lot of money.

I'm sure there is room for the market cap of bitcoin. As you are saying the gold is worth 300B in just USA market then just imagine how it is worth in the whole world. That's a lot of money and if that can come into gold then I'm pretty sure it can come into all new crypto currency like bitcoin.

Again, the "digital gold" theory. For me, it's based on wishful thinking.

A simple example of the fundamental difference between gold and Bitcoin comes into light when trying to answer the question: Does gold have alt-coins?

You can now say that every other precious metal could be an "alt-coin" for gold. But gold has properties that can't be copied: It's beautiful (and thus used in jewelry), useful in some industrial applications (other metals have other applications), and has a lot of tradition as store of value, (as you already said but my emphasis is in another point). Bitcoin, instead, is technically much easier to copy and so fundamentally different.

Above all the third property of gold is also pointing in the direction I went with my previous post in this thread: The most important aspect that dictates long-term prices and market cap is the real use. Gold is so institutionalized as "store of value" that you would need decades or centuries to let holders switch to other assets. (And it's difficult to move, unlike Bitcoin)

Only if Bitcoin achieves an important "network" that really use it, it can come near the properties and the "un-copyability" of gold, and so become a real competitor.