According to Coinmarket.com, the total market value of all 11,899 cryptos in existence is $2.8 trillion or just about exactly 10% of the US GDP for 2020 and almost 4% of the entire global GDP. Bitcoin and Ether account for about half of the total market value of cryptos. The only countries that have a GDP that’s bigger than $2.8 trillion (the market value of all final goods and services from their nation in a given year) are the big four: Germany, Japan, China and the US. The total global net wealth is $431 trillion, so at this moment, cryptos account for more than 0.5% of the world’s net wealth.
When I bought bitcoin and started taking it as payments at TradingWithCody.com back in 2013 when it was at $100, there were only 11 million bitcoins in existence for a total market value of $1.1 billion. Ether ETH had a total market value of $0 in 2013 because it wasn’t even created for another two years. The US GDP, World GDP, and global net wealth back in 2013 were $16.8 trillion, $71 trillion and $250 trillion respectively. That means global net wealth increased by $181 trillion since 2013 and bitcoin accounted for 0.5% that wealth created since then and all cryptos accounted for 1% of all wealth created since then.
At the end of 2018 bitcoin was at $3300 and there were 18 million bitcoin out there for a $59 billion market value and eth was a $100 with 120 million in existence for a market cap of $12 billion. The US GDP, World GDP, and global net wealth back in 2018 were $20.6 trillion, $85.9 trillion and $317 trillion respectively. That means global net wealth increased by $114 trillion since bitcoin bottomed in 2018, and bitcoin accounted for almost 1% of all wealth created and all cryptos accounted for almost 2% of all wealth created since 2018.
The tiny percentage that crypto accounted for in the total amount of global wealth created since 2013 and since 2018 doesn’t seem like much compared to the amount to total global wealth that’s been created in the last three years even with a pandemic and subsequent economic crash. Even as I feel like we’re quite clearly in another Great Cryptocurrency Bubble, seeing these numbers that I just put together for this analysis makes me less concerned about bitcoin and eth and their own valuations compared to the amount of wealth that the world creates in any given year.
On the other hand, I expect that there will be about 10,000 of the 11,899 cryptocurrencies currently in existence with a cumulative market value measured in the hundreds of billions of dollars that will evaporate in the next three years. Which leads me to an idea.
A few weeks ago I read a NY Times article in which the author had himself created his own cryptocurrency. From the article:
“So one day in May, I created my own cryptocurrency. I did it on a Zoom call with an excitable 36-year-old in Taiwan, Dan Arreola, who had posted a tutorial on YouTube about how to make, and promote, a ‘scam coin.’ It has more than 240,000 views.
That’s if you use a site for the tech savvy. For everyone else, there is Cointool. After a few minutes of tweaking, and about $300 in fees, I pressed a button. Instantly, 21 million coins were minted.
I christened them Idiot Coins.”
So this got me thinking about creating my own CodyCoin or something just as a joke to learn more about how so many of these 11,899 cryptos that Coinmarketcap.com is tracking have gotten started. But then I thought if I’m going to bother making my own crypto that maybe I should make it meaningful instead and that it should reflect some sort of bet that we otherwise couldn’t make. So what are the two single most obvious bets that I’d like to make right now? Well, you know that I’m all about The Space Revolution. Is there some way that we could make a SpaceCoin that creates value by being involved in The Space Revolution? There’s some dude who sent an NFT to space but that’s not the same thing. I’m thinking there’s got to be some meaningful way of creating value for The Space Revolution with a crypto SpaceCoin.
And then the other most obvious place to make money in the markets over the next three years would be to….yes, to bet against the thousands of other crappy cryptos out there that random people have created without any regards for disclosure, regulations, transparency, safety, etc. In other words, is there some way to create the AntiCryptoCoin?
I’d love to hear the thoughts of any Trading With Cody subscribers on these two crypto ideas that we should create together if we can figure it all out.
While we’re on the topic of cryptos, I wanted to share the video of the CEO from Immersed sitting me down to talk cryptos on their company podcast while I was in Austin a few weeks ago for Amaris’s therapy. I met the whole team at Immersed’s headquarters and I remain excited about the future for that company after the visit.