March 9, 2019    Block Chain Market Observations

March 9, 2019 Block Chain Market Observations

I decided to do something different for this blog.  I want to point out different sub-categories within the Coinmarketcap.com ranking systems based on market cap and give my opinions on why some comparisons have far more to them than meets the eye.  This will be the first blog in a multi part series which attempts to group digital assets into one of four classes.  Commodity, Equity, Exchange or Trading Vehicle.

I have to snips of data from coinmarketcap.com.  You will see the name of the asset, ticker symbol CMC ranking and marketcap.  I focused on the assets valued from one through twenty and added a few of importance to me, which I will expand upon throughout the blog.

 

 

The total market cap for blockchain coins, tokens and projects listed on CMC currently sits at $134, 149,738,366.

Bitcoin has a current market cap of $68,888,641,244.  Hence, Bitcoin accounts for 51.3% of the block chain asset classes total valuation.

Assets 2-10 are valued at $44,147,876,659.  These nine assets account for 32.9% of the total market valuation.

Assets 11-20 are valued at $7,091,769,500.  These 10 CMC ranked assets account for 5.28% of the total index.

With Bitcoin accounting for 51.3%, and assets 2-20 accounting for 38.18% of total market  value, the top twenty assets by CMC valuation comprise 89.48% of the total dollar value.

I will say this again.  The top 20 Block chain assets according to Coinmarketcap.com ranking account for 89.48% of the total market valuation.

 

At this point some of you reading may think, WOW, this guy just added numbers from the CMC website and stated facts.  You would be absolutely correct.

 

In my search for information, I went to the Merriam Webster Dictionary and looked up a few words.  Commodity and Exchange were the two I was looking for.

Commodity = an economic good: such as a product of agriculture or mining.  agricultural commodities like grain and corn. something useful or valued

 

Exchange = place where things or services are exchanged.  an organized market or center for trading in securities or commodities.

Equity = A risk interest or ownership in property

 

The next grouping, i was unable to find a definition, so I will define myself.

Trading Vehicle =  Something used in daily market activities whose primary purpose is a medium of exchange in trading various assets.

 

These are just my opinions and the first note I would like to make, is that I commend all of the block chain assets both large and small on their progress and hard work.

 

Coming from a Wall Street background, I generally try and classify like items with like items for an equal comparison.

In the top 10 most valuable block chain assets, I found the following:

One is an Exchange, Binance Coin.

One is a trading vehicle, Tether.

Four are most similar to commodities, Bitcoin, Ethereum, Litecoin and Bitcoincash.  These four also happen to be on Coinbase.

Four have many traits that are similar to Equities or companies, Ripple, EOS, Stellar and Tron.

 

My mind thinks of a commodity as something that is tangible, widely accepted as a store of value, traded on exchanges, and has some mining component.  With mining costs vs market price being one of the primary market drivers.

As I look at the precious metals markets and see Gold, Silver and others, I immediately drew some parallels to the digital asset world.  If prices rise quickly, miners in both digital assets and physical assets shift from one to another.

Stating that Binance is an exchange, should be fairly obvious, they are the number one exchange in digital assets almost daily.

Tether being a trading vehicle should also be fairly obvious.  Tether is the ONLY Digital Asset to trade more than its entire float on a daily basis.  Today, Tether has traded more than 9 billion dollars in volume with just 2 billion coins outstanding which is amazing that a daily volume of a digital asset can be 450% of its outstanding total.  Going further, Tether has traded 150% or more of its total outstanding for 90 days in a row.

Last but not least are the Projects which seem to have many traits similar to equities.  Ripple, EOS, Stellar and Tron.  These four have visible leaders, offices and many other traits which companies do.

I am writing this blog series as an opinion only, and to try to help educate those both new and old to the digital asset space that some comparisons are very tough to make.

I would not attempt to rank 100 ounce bars of Gold vs. Exxon Mobil, nor would I try and rank Barrels of Crude Oil vs Google or Apple, so I ask why is the CMC ranking of all the block chain assets so important, when clearly many have virtually no similarities.

For me, it would be incredibly difficult to make a comparison of Binance and Tether or Bitcoin a Ripple.  They have extremely different characteristics.

Please come visit soon for part 2 in this informational series.

 

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