Holger Zschaepitz, market analyst at Welt, pointed out that Bitcoin (BTC) is approaching Google’s valuation, as it is heading towards $ 1.5 trillion in market cap.
Currently, as of April 17, Bitcoin’s market cap hovers around $ 1.12 trillion, as the entire crypto market valuation remains comfortably above $ 2 trillion.
What is the Similarity Between Bitcoin and Google?
The similarity between Bitcoin and Google that Zschaepitz pointed out is that both have a dominant position in their respective industries.
Bitcoin has the strongest network effect in the cryptocurrency market, accounting for over 51% of the global cryptocurrency market.
Google dominates the search engine market and has a massive share of the video sharing and streaming industry with its ownership of YouTube.
“The exponential era: Thanks to network effects, the value of #Bitcoin increases and w / $ 1,159tn has almost reached the market value of a classic #Google network share which is worth $ 1.5tn.”
Whether Bitcoin’s dominance in the cryptocurrency market will be sustained over the long term remains in question, due to the rising valuation of Ethereum and layer one blockchain networks.
However, the main difference between Bitcoin and the rest of the market is that there is a clear institutional demand for BTC as a store of value due to its unparalleled computing power in a blockchain network and, therefore, its security and of his lack of confidence.
Therefore, investors generally view Bitcoin as a hedge against inflation and the de facto reserve cryptocurrency.
In January, JPMorgan strategists wrote that Bitcoin could reach $ 146,000 as it competes with gold as a store of value.
The strategists said:
“This long-term increase based on an equalization of the market capitalization of bitcoin to that of gold for investment purposes is conditioned on the convergence of the volatility of bitcoin towards that of gold over the long term. This is because, for most institutional investors, the volatility of each class matters in terms of portfolio risk management and the higher the volatility of an asset class, the more risk capital consumed by that class. of assets is high. “
Traditional financial institutions also recognize the importance of Bitcoin’s network effect and its dominance in the crypto market as a must-have store of value.
Where does the price of Bitcoin go from here?
For the foreseeable future, sentiment around Bitcoin remains mixed after Coinbase went public.
Following COIN’s listing, there is speculation that it could mark the top of the crypto market.
However, most of the data on the chain and market metrics such as finance rates don’t necessarily suggest that a discharge peak is near.
For example, a popular crypto trader known as “Crypto Capo” mentionned:
“I have read a lot of people saying that the funding is high, not only in Bitcoin, but also in altcoins. It’s relative. If we compare the current funding levels with the highs of 2017, we see that they are low, taking into account that the price is three times higher. Also, the current trend is spot trading, not derivatives. “
Meanwhile, the chain’s key indicators also suggest that the price of Bitcoin is still far from the top of the bull market. On the contrary, the price of BTC can easily reach six digits, as expected on the popular stock-flow model, and even reach $ 400,000, according to analysts at Bloomberg.