Crypto Market Commentary – Bullish Steem Inverted Hammer bars? Cryptosphere to Reach Gold Parity? – 02/17/17steemCreated with Sketch.

in #steem7 years ago (edited)

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Oleg Andreev posted an image comparing bitcoin’s transaction scalability to that of gold.

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My long term premise in the cryptosphere at one point in time was that bitcoin would be the currency of the internet and potentially a strong global currency comparable to gold… and ultimately possibly a global reserve/backbone currency. Given bitcoin’s unique properties of money resembling gold, my initial long term valuation was parity with the gold market cap. I later revised this to parity with the gold market cap for the entire digital currency space, as it became obvious that competing systems had a chance and were not going away.

To calculate gold parity with the cryptosphere, we first need to find out what the entire cryptocoin market capitalization is. Fortunately, coinmarketcap.com has made this very convenient, as it reports that the value of all cryptocoins is just under $20 billion. With roughly 165 billion grams of gold on earth and a price of about $40.00/gram, gold’s market cap is roughly $6.6 trillion. Dividing $6.6 trillion by $20 billion gives us a factor of 330.

In other words, the entire cryptosphere is undervalued by a factor of 330 times by this metric. My belief is that it will take decades for this valuation to become a reality, if it ever does. However, only reaching 1% of the gold market cap leaves us with a gain of 300% for the entire crypto space. That is well within reach, even in the short term.



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I had first drawn the support level at $2 billion back in August.


Bitcoin dominance breaking below that trusty 85% congestion level again.
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Disclaimer: None of this is advice of any kind.

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