Update: The trend continues. Over the last 24 hours, bitcoin has risen over 8 percent to $7134, while ethereum has fallen 3.5 percent to $290.
As ICO fever rolls along and other forms of capital slip, the crypto market is more important than ever to startups working or hoping to raise in the growing niche.
Today, the aggregate value of cryptocurrencies set new records, spiking to nearly $185 billion as of the time of writing. The amount crests prior records set when August concluded, and the summer hit its midpoint.
Indeed, the CoinMarketCap chart showing the rise in aggregate cryptocurrency market cap is shocking:
Heady times indeed. But while the record itself is interesting, what is going on inside of that chart is even more notable.
While we often discuss what is going on with all cryptocurrencies, what is happening apart from the bitcoin market is also interesting. The following chart is the same as the first, but sans bitcoin:
Without bitcoin, other crypto currencies started slow, and then fired into the air, creating nearly $100 billion in just a few months. That explosion is precisely why you have been unable to avoid reading about crypto since the year began.
You can view the above pace of value creation as either complete lunacy, or merely the market reacting to a technological innovation.
Dialing into the very end of the chart, and comparing it to the first chart, you can see that the chart inclusive of bitcoin has shot higher, while the sans-bitcoin chart is essentially flat. So the current record-setting boom is predicated on crypto’s elder statesman. Given the popularity of the Ethereum blockchain, I might have guessed at a different result.
As traditional markets test new records, bitcoin is pushing its asset class to fresh heights.
Last thought: Going from $1 to $2 is a 100 percent gain that costs $1 per unit of the substance in question. To double again requires double the value creation. In practice, it gets harder to generate the same sort of return as the value of an asset rises in raw dollar terms. Bitcoin $6,000 is twice as hard to double as bitcoin $3,000 and so forth. It will be interesting to see how bitcoin manages to grow in value against the law of large numbers.
Recall that bitcoin is considered by many to be a store of value and not a transactional substance. Therefore, its value must rest on utility of some variety. Gold, an oft-considered potential cognate, has material, aesthetic, and store-of-value use cases, for example. Bitcoin likely can’t continue its upward ascent with just one of those three.
Today, however, Team Hodl looks smarter than double suspenders.
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