Will the Crypto Market Cap Grow?
One of the most commonly asked questions by cryptocurrency watchers and investors is whether the crypto market cap will grow. Firstly, it’s important to understand what the market cap is and how that applies to future growth.
Market capitalization, or market cap, is the dollar value for the entirety of the cryptocurrency market. Each cryptocurrency has its own market cap, that can then be measured as a whole. For example, in April 2018, the market cap for all 1,500 measurable cryptocurrencies was $322,721,207,064.
How to establish the crypto market cap is a straightforward equation. Simply multiply the number of units by the value of each unit. The same calculations apply to the stock market, but it’s important to note that many experts believe this way of measuring the market cap is ineffective for gaining the actual market cap due to fluidity.
Do Experts Think the Crypto Market Cap Will Grow?
If you were to ask any cryptocurrency expert whether the crypto market cap was expected to grow exponentially, you’re sure to get a different answer every time. While many experts believe there will be substantial growth, there are just as many that are unsure. However, if you were to talk to digital currency exchange owners, many of them would be more than confident about what we can expect from the market over the coming years.
In February 2018, the founder and CEO of Kraken – a digital currency exchange – made a bold statement. Jesse Powell believed unparalleled growth was on its way, with the market to hit one trillion dollars in 2018. He also thought Bitcoin – which had a value of under $8,000 in April 2018, would see a dramatic increase in value to $50,000. Following this statement, the market declined, and it would take a value increase of close to 300 percent to meet his crypto market cap predictions.
At the time, it didn’t seem out of the question. In January, the market had bloomed to almost $840 billion; so many different experts in the field were coming to the same conclusion. However, in the months that followed, it dropped by 70 percent. In 2018, it barely even hit the halfway point – so could he still be right?
What Could Create Growth in the Crypto Market Cap?
If you’re a firm believer in seeing unparalleled growth in the crypto market cap over the coming years, there are many different scenarios for this to occur. Firstly, education. Children are more computer-savvy than ever before, with many having mastered the humble tablet, for example, before they even learn to read. Therefore, there is potential for the children of today to grow up and educate themselves on blockchains, smart contracts, and cryptocurrency as a whole.
As a result, there will be training courses installed into mainstream educational facilities that encourage the use and investment of cryptocurrency, and the development of blockchain networks. Knowledge is power and creating demand can only further the crypto market cap’s growth.
Another possible way in which to grow the market cap is through increased interest in altcoins. We can all recall the flurry of excitement for Bitcoin, so it’s hoped that renewed interest in altcoins could create crypto market cap growth.
How can Crypto Market Cap Growth Be Measured?
There are many ways in which to measure crypto market growth, but the most successful method is through the use of the Google Trends tool. In essence, it estimates how lucrative the crypto market is based on how many people are querying it.
When Bitcoin’s exponential growth hit the news in December, it created a wave of excitement. If you were to Google Bitcoin in various terms, you would see that it had a score of 100. However, now that the buzz has worn off and people are disinterested in following Bitcoin, that particular search term has been searched almost 90 percent less in a matter of months.
Most certainly connected is the news that Bitcoin lost two-thirds of its value in a very short period. People chase money and if the investment is not a “sure thing,” it is almost certainly going to affect growth.
What Role Does Each Country Play in Crypto Market Caps?
For the crypto market cap to grow, there need to be investors and a high level of interest in cryptocurrency. What’s more, you need to be legally able to invest. Many countries around the world are now imposing restrictions on cryptocurrency usage and investment. European Union regulators have issued customer warnings, South Korea and India have restricted or banned their use, and some countries have prohibited the use of specific cryptocurrencies in favor of their own.
China is an excellent example of how a country-wide ban can impact the market. In September 2017, China banned all initial coin offerings (ICO) and Bitcoin exchanges. As a result, the market dropped substantially, but only temporarily, however. Close to one billion dollars were removed from the market and returned to Chinese investors. Within a matter of days, the market had settled itself.
What’s more, the government ban didn’t actually stop all Chinese investors from putting their money into cryptocurrency. They just got more inventive with how they went about it. Therefore, it’s clear to see that even if many more governments try to “protect” their people by imposing investment bans, it may not affect the crypto market cap permanently. It may have a slight impact as investors money is drawn out of each cryptocurrency, but it then settles itself as either A) those investors trade through other countries or B) it settles naturally.
No one can honestly know whether the crypto market cap will grow or by how much. Experts in the field have a better idea than anyone else, but they still can only play the guessing game. We saw this with Jesse Powell and his one trillion-dollar predictions. He saw the market was looking lucrative, took a punt, then it dropped by 70 percent.
If there was one way that could encourage the market to grow, it’s by maintaining interest and prompting a flurry of excitement. The more people who invest, the more people who hear about cryptocurrency. The crypto market cap can most certainly grow, but it’s entirely up to us to make it happen.