Bitcoin beats America’s largest bank- JP Morgan Chase & Co’s market cap. Can Bitcoin replace gold?
As of writing, the market cap of America’s Largest bank- JP Morgan, stands at nearly $345 Billion, whereas the market cap of Bitcoin is $368 Billion. It has fallen from an all-time high of $69,000 to $19,000, but despite the fall of more than 70%, it is still larger than JP Morgan.
The evolution of finance
Finance has evolved over the years. The fiat system that the world is using has various demerits. Finance, as we know, has gone through multiple stages of evolution.
The first mode of exchange was the barter system, wherein people exchanged their goods with others’ goods. Then gold or other metal coins were used as a mode of exchange. There was a problem carrying huge quantities of gold.
Thus the government introduced currency notes backed by gold. Later, President Richard Nixon introduced the fiat system in 1971, wherein the currency notes were no longer backed by gold.
Bitcoin: The future of finance
Fiats money is centralized, which means the countries’ central banks have the power to print more fiat money. As the supply of money increases in the economy, it can lead to inflation.
The total supply of Bitcoin is capped at $21 million. Hence it cannot be printed whenever some central authorities want to. The cap in supply makes the largest crypto a store of value and practically inflation-proof.
Bitcoin vs. Banks
The banks operate in fiat. They offer various facilities like transfer of money, cross-border payments, lending, and borrowing, etc. However, the key is centralization here. The control of customers’ money is with the centralized authorities running the banks.
Bitcoin can do cross-border transactions faster than traditional banks. Decentralized Finance (DeFi) will enable lending and borrowing without a need for centralized authorities. Institutes like Square are focusing on launching Bitcoin-focused DeFi Platforms.
With these factors in focus, the community believes that Bitcoin will replace banks. This justifies the market cap of Bitcoin to be larger than America’s Largest Bank- JP Morgan.
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