Can you understand the alphanumeric string?
It’s the crypto equivalent of the word “Bitcoin” – the cryptocurrency that traded at $ 46,578 (35 lakh) per unit on December 20, resulting in a global market cap of $ 881 billion. This is 3.36 times the GDP of Pakistan, 2.72 times that of Bangladesh and 10 times that of Sri Lanka. Having started at $ 1 in 2009 at launch, Bitcoin remains by far the most expensive crypto in history. If an investor had invested $ 100 in Bitcoin in 2009, the investment today would be worth $ 4.67 million (equivalent to 35 crore)!
It is this non-linear combination that has given birth to a 24-hour crypto bazaar brimming with over 15,700 currencies and a cumulative market cap of $ 2.37 trillion. It includes coins and tokens traded in cents and even smaller fractions.
Of all these, the top 10 cryptos that have caught the attention of investors include Bitcoin, Ethereum, Cardano, Dogecoin, Litecoin, Bitcoin Cash, Filecoin, Ethereum Classic, Monero, and Helium, representing a market cap of 1.45 trillion dollars (See: The Top 100). Indian crypto exchanges together offer a basket of 500 currencies to choose from, according to Crebaco, a crypto research and analysis company. Investing in crypto began in India in 2013 when Bengaluru-based Unocoin became the country’s premier crypto exchange.
As of 2013, the cumulative investments made by Indians in crypto amounted to around $ 1 billion as of March 2020, and today they are worth nearly $ 8 billion (₹ 60,000 crore), according to Crebaco. However, a leading exchange group in the country, including WazirX, ZebPay, CoinDCX, CoinSwitch Kuber and others, ran an advertisement in a large pink daily that complied with the Self-Regulatory Code of Conduct of the Indian Committee of the blockchain and internet cryptocurrency and Mobile Association of India, stating that tens of millions of Indians have invested $ 80 billion (₹ 6 lakh crore) in crypto. Sidharth Sogani, founder and CEO of Crebaco, however, believes the number is inflated. “It must be the volume and not the value invested because the average Indian investment is too low,” he adds.
Even though governments and central banks still accept the enormity of digital assets, their returns have proven to be more than just a factor of inflation. Bitcoin’s year-to-date return is 60.40%, far outpacing other asset classes, including real estate and gold (see: More than a hedge against inflation).
In fact, the yellow metal – the traditional inflation hedge – lost its luster over the year, offering a negative return of 8%. With central banks freeing up liquidity by reducing interest rates to near zero, silver should have soared to gold. But this is not the case. Since the 2008 global financial crisis, central banks have injected more than $ 25 trillion into the global economy, including more than $ 9 trillion during the pandemic period alone. But gold didn’t sizzle as cryptos stole the show.
According to Morgan Stanley, the market capitalization of gold has historically hovered around 5 to 15% of global GDP, reaching 10 to 15% after economic crises when demand for safe-haven assets tends to increase and reinflation policies. are used. If Bitcoin, the report says, captured 50% of the demand for gold that is driven by its use as a store of value, its market capitalization could reach $ 6 trillion by 2025, more than 2.5 times the current market value.
And this is not without reason. “In this time of inflation, Bitcoin has outperformed gold. Bitcoin and other digital currencies are widely viewed as a shield against inflation, mainly due to its limited supply, which is not influenced by its price, ”said Nigel Green, Managing Director and Founder of deVere Group, an independent financial consultancy firm.
For example, only 21 million units of Bitcoin are programmed to exist, unlike other digital currencies and tokens whose supply could increase depending on demand and supply. Not surprisingly, this represents a portion of the crypto’s market capitalization.
Beyond Bitcoin, the crypto basket has enough and more to offer – some promising, others failing.