Bitcoin is still worth more than America’s largest bank
Bitcoin Beats America’s Largest Bank – JP Morgan Chase & Co’s Market Cap. Can Bitcoin replace gold?
At the time of writing, the market value of America’s largest bank – JP Morgan, is almost 345 billion dollars, while the market value of Bitcoin is 368 billion dollars. It has fallen from an all-time high of $69,000 to $19,000, but despite the drop of more than 70%, it is still bigger than JP Morgan.
The development of finance
Finance has evolved over the years. The fiat system that the world uses has various disadvantages. Finance, as we know, has gone through several stages of development.
The first form of exchange was the barter system, where people exchanged goods for other people’s goods. Then gold or other metal coins were used as a means of exchange. There was a problem with transporting large amounts of gold.
Thus, the government introduced currency notes backed by gold. Later, President Richard Nixon introduced the fiat system in 1971, where the currency notes were no longer backed by gold.
Bitcoin: The Future of Finance
Fiat money is centralized, which means that countries’ central banks have the power to print more fiat money. When the supply of money increases in the economy, it can lead to inflation.
The FED printed 3 trillion dollars during the Covid crisis. It has led to an inflation of 10.1%, a record high in the last 40 years. This has proven that fiat is not a store of value.
The total supply of Bitcoin is limited to $21 million. It cannot therefore be printed when some central authorities want it. The supply cap makes the largest crypto a store of value and virtually inflation-proof.
Bitcoin vs. banks
The banks operate in fiat. They offer various facilities such as money transfer, cross-border payments, lending and borrowing, etc. However, the key here is centralization. Control of the customers’ money lies with the centralized authorities that govern the banks.
Bitcoin can make cross-border transactions faster than traditional banks. Decentralized finance (DeFi) will enable lending and borrowing without the need for centralized authorities. Institutions like Square are focusing on launching Bitcoin-focused DeFi platforms.
With these factors in focus, the community believes that Bitcoin will substitute banks. This justifies the market capitalization of Bitcoin to be greater than the largest US bank JP Morgan.
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