Bitcoin’s market capitalization has hit record levels in 2020 alongside a surge in the asset’s price. With the market cap, the pioneer cryptocurrency is now larger than any bank globally.
Data presented by Bankr indicates that Bitcoin’s market capitalization of $421.28 billion as of December 17, ranks it higher than any bank globally. American banking giant JP Morgan trails Bitcoin with a Market capitalization of $367.82 billion. Among banks, JP Morgan has the highest market cap.
The Royal Bank of Canada ranks as the tenth-largest bank with a market cap of $116.24 billion. The value is almost four times less than Bitcoin’s. Among the top banks, both China and the United States have four entries each.
Bitcoin’s all-time high sparks surge in market cap
The rise in Bitcoin’s market capitalization correlates with the asset’s price movement. Bitcoin’s price has grown substantially in 2020 by hitting a new all-time high in almost three years. On December 17, the asset briefly crossed the $23,000 mark.
Making this top position in the market cap compared to banks is significant for Bitcoin. It illustrates that Bitcoin is still just as big as a stock rather than it rising to an asset class of its own. Interestingly, Bitcoin has now evolved to perform some banking services, like lending and borrowing. The asset is also used in processing payments and facilitating financial services like international trade.
With Bitcoin emerging as the world’s biggest bank, most traditional financial institutions have taken steps towards commercializing the asset and blockchain in general. For some big banks, the focus has increasingly turned to figure out how they can make money from the blockchain. For example, JPMorgan Chase revealed its in-house digital currency JPM Coin had gone live for the first time with a large technology client.
The surge in Bitcoin price came in the wake of the coronavirus pandemic, resulting in economic turmoil across the board. Notably, the traditional stock market crashed, but Bitcoin remained resilient to position itself as a possible alternative source of wealth during challenging economic times.
Institutional investors push Bitcoin to a new all-time high
It is worth mentioning that Bitcoin rallied since falling to under $4,000 in March’s wake of the coronavirus. The rally was boosted by some of Wall Street’s biggest banks and investors turning to Bitcoin. The recent rally to an all-time high was mainly sparked by the announcement by PayPal to support Bitcoin buying and spending services to its millions of users.
Investments made in Bitcoin by major companies like MicroStrategy, Grayscale, and Stone Ridge, public support for crypto from prominent financial experts, the recent Bitcoin halving, and other factors have also given Bitcoin’s price a major boost over the past few months. As the benchmark cryptocurrency, Bitcoin has gotten to a place where institutional investors and banks are legitimately looking at investing in the sector as a defense against currency devaluation.
Unlike Bitcoin’s 2017 bull run, which saw the price rise from under $1,000 at the beginning of the year to $20,000 by December, the crypto community agrees that 2020’s rally is mainly driven by institutional investors. Three years ago, retail investors and the ICO frenzy played a key role in the asset’s new all-time high.