9 Years After Media Covered Bitcoin With $1 Billion Market Cap; Are economists still at a loss?
More than nine years ago, Bitcoin (BTC) reached a market cap of $1 billion, after its price at the time passed $95, leaving financial experts scratching their heads over the success of the flagship digital asset.
One of those experts was Lawrence White, a professor of the history of banking and money at George Mason University in Virginia, who, according to the article by IEEE Spectrum Morning E. Peck April 2, 2013 said:
“It’s something of a mystery that Bitcoin has a positive value at all, since it wasn’t launched in the way a new currency is usually launched.”
Since then, Bitcoin has shown no slowdown, reaching its all-time high of over $67,000 in November 2021. At that time, the market capitalization of the first cryptocurrency rose to a whopping $1.27 trillion, but due to the sell-off of the cryptocurrency market, it stands it currently stands at $439 billion.
Nevertheless, if the financial experts were baffled by Bitcoin’s success nine years ago, what would they say if they knew it would one day surpass $1 trillion in market capitalization?
Bitcoin’s unstoppable progress continues
As Bitcoin did just that in February 2021, Deutsche Bank research strategist Jim Reid said at the time that the asset “has started to become so big that it’s arguably creating its own demand as companies and institutions start to make inroads into a field they would” not have affected a few months earlier.”
Additionally, he stated that:
“Ironically, it’s making itself a credible asset class for many by rallying so much lately and also by getting increasing institutional buy-in.”
At the same time, researchers at banking giant JPMorgan (NYSE: JPM ) believed that Bitcoin’s rally was unsustainable and did not make much sense. Investment firm Citadel CEO Ken Griffin was also dismissive, stating that:
“I don’t see the economic basis for cryptocurrencies. I understand how to think about exchange rates around the world. (…) I don’t know how to think about what is effectively a digital token.”
However, the run towards $1 trillion had been predicted by Bloomberg’s senior commodities expert Mike McGlone in his chirping November 16, 2020, where he called it “the digital version of gold.”
What do the experts think today?
Interestingly, some of the experts who were previously baffled by Bitcoin’s success are now changing their tune, with JPMorgan stating that Bitcoin and crypto are now the preferred “alternative asset class”, outperforming real estate.
At the same time, Ken Griffin’s Citadel Securities, one of the largest market players in the world, has teamed up with Fidelity Investments and Charles Schwab Corp (NYSE: SCHW) to create a crypto offering that will expand their clients’ access to digital assets.
McGlone remains bullish on Bitcoin, voicing his opinion that it would outperform in the second half of 2022, despite the market’s decline from the first half spilling over into H2, as Finbold reported in late July.
As it stands, Bitcoin is currently trading at $22,969, down 1.54% on the day but up 9.84% over the past seven days, according to CoinMarketCap data.
