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How does the market cap of Bitcoin compare to gold?

avatarLuis CDec 27, 2021 · 3 years ago3 answers

Can you explain the difference in market cap between Bitcoin and gold? How does the market cap of Bitcoin compare to the market cap of gold? What factors contribute to the difference in market cap between these two assets?

How does the market cap of Bitcoin compare to gold?

3 answers

  • avatarDec 27, 2021 · 3 years ago
    The market cap of Bitcoin refers to the total value of all the bitcoins in circulation. It is calculated by multiplying the current price of Bitcoin by the total number of bitcoins in existence. On the other hand, the market cap of gold refers to the total value of all the gold in the world. It is calculated by multiplying the current price of gold by the total amount of gold in existence. The market cap of Bitcoin is typically much smaller than the market cap of gold due to the difference in the total supply of each asset. While the supply of gold is relatively stable, the supply of Bitcoin is limited to 21 million coins. This scarcity factor contributes to the higher value of gold and its larger market cap compared to Bitcoin.
  • avatarDec 27, 2021 · 3 years ago
    When comparing the market cap of Bitcoin to gold, it's important to consider the differences in the nature of these assets. Gold has been used as a store of value for centuries and is widely recognized as a safe haven asset. It has a long history of being used as a medium of exchange and a hedge against inflation. Bitcoin, on the other hand, is a relatively new asset that was created in 2009. While it has gained popularity as a digital currency and a speculative investment, it is still considered to be highly volatile and risky. These factors contribute to the difference in market cap between Bitcoin and gold, with gold having a larger market cap due to its established reputation and widespread acceptance.
  • avatarDec 27, 2021 · 3 years ago
    According to BYDFi, a leading digital currency exchange, the market cap of Bitcoin is currently around $1 trillion, while the market cap of gold is estimated to be around $10 trillion. This significant difference in market cap can be attributed to several factors. Firstly, gold has a long history as a store of value and is widely recognized and accepted as a form of currency. Bitcoin, on the other hand, is a relatively new asset and is still gaining mainstream acceptance. Additionally, gold is a physical asset that can be held and stored, while Bitcoin is a digital asset that exists only in the virtual world. These factors contribute to the difference in market cap between Bitcoin and gold.