Ethereum market cap hits $337 billion, surpassing Nestle, P&G and Roche

The price of Ether (ETH) has recovered more than 200% in 2021, resulting in a massive market capitalization of 3,337 billion. This impressive figure pushed the value of the Ethereum network ahead of the total market capitalization of major companies such as Procter & Gamble ($326 billion) and PayPal (PayPal 308 billion).

The market cap figure is achieved by multiplying the last trade price by the total outstanding number of coins, regardless of whether they have been moved. Thus, it seldom reflects the average price where most investors transacted.

For investors in traditional finance, “value” is evaluated by comparing multiples and valuations. These are often calculated in the form of profits, sales and market share, and trying to apply these same value metrics to cryptocurrencies with multiple use cases creates uncertainty and discomfort.

Ether is a multifaceted asset that is difficult to evaluate
There is No bulletproof metric available to assess how the value of Ether accumulates against its potential. The cryptocurrency could simultaneously act as a digital store of value while also functioning as the token required to access the Ethereum network.

Therefore, one should consider the coins deposited on the exchanges or the effective exchange rate of hands when comparing different asset classes. The existence of regulated derivatives markets allows institutional investors to bet against the price of the asset, and is another factor that must be taken into account.

Highest global asset ranking by market capitalization. Source: infinite market capitalization
While the merits of comparing the market capitalization of different asset classes side by side are debatable, the metric works essentially the same way for commodities, stocks, and mutual funds.

According to data from Infinite Market Cap, Ether has recently surpassed the market capitalization of Nestlé, Procter & Gamble, PayPal and Roche.

American consumer goods multinational P & G was founded in 1837 and has a diversified brand portfolio, including personal health, consumer care and hygiene. With 100,000 employees worldwide, the conglomerate recorded a net income of 1 13 billion in 2020.

On the other hand, Ethereum has 2,320 average monthly developers, according to The “Electric Capital Developer Report”.”Although it is not a secular company, its decentralized applications handle more than 100,000 active addresses daily. Even more impressive is the $ 12 billion daily transfers and transactions on the Ethereum network. These numbers alone are exceptional even for an S&P 500 company.

Stocks have their own risks, which cannot be ignored
Comparing a 183-year-old company that relies heavily on production and distribution with a technology-based protocol is unlikely to uncover many similarities. However, stock investors enjoy the fruits of dividends, and although some will argue that Ether could be wagered for a return, there are more significant risks involved.

Investors who bet on the Eth2 contract have the option to become a full validator or join a pool, but their coins could be lost due to malicious activities or failure to validate network transactions. Similar risks arise when Ether is delivered through centralized services and decentralized protocols.

In the meantime, listed companies may create new shares to benefit from excessive valuations or increase their cash position.

Tax changes, operating liabilities and regulatory changes are other risks that shareholders sometimes face. For example, Roche was recently challenged for $ 4.5 billion from the government for misleading the Centers for Disease Control, according to an open lawsuit in September 2019.

Decentralized protocols are virtually free of these dangers, and perhaps this justifies their skyrocketing assessments.

Considering the risks outlined above, investors might conclude that holding Ether is less risky than buying shares. At least self-custody is possible, making the asset less dependent on third parties and unauthorized transactions.

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