9 Years After Media Covered Bitcoin Reaching $1 Billion Market Cap; Are economists still perplexed?

More than nine years ago, Bitcoin (BTC) reached a market capitalization of $1 billion, after its price at the time surpassed $95, leaving financial experts scratching their heads over the success of the flagship digital asset.

One such expert was Lawrence White, a history of banking and currency professor at George Mason University in Virginia who, according to the article by IEEE Spectrum Morgen E. Peck on April 2, 2013, stated that:

“It’s a mystery that Bitcoin has a positive value because it was not launched in the same way that a new currency is usually launched.”

Since then, Bitcoin has shown no slowdown, reaching its all-time high of over $67,000 in November 2021. At that time, the market capitalization of the first cryptocurrency reached $1.27 trillion, although, due to the cryptocurrency market selling off, it currently stands at $439 billion.

Bitcoin’s all-time market capitalization chart. Source: CoinMarketCap

Still, if financial experts were baffled by Bitcoin’s success nine years ago, what would they say if they knew it would one day surpass $1 trillion in market value?

Bitcoin’s Unstoppable Advance Continues

As Bitcoin did in February 2021, Deutsche Bank research strategist Jim Reid said at a time when the asset “has begun to become so large that it is arguably creating its own demand as companies and institutions begin to make inroads into an area they would not have touched a few months ago.”

Additionally, he stated that:

“Ironically, it is turning into a credible asset class for many by rallying so much lately and also gaining growing institutional buy-in.”

Meanwhile, researchers at banking giant JPMorgan (NYSE: JPM) found Bitcoin’s rally to be unsustainable and didn’t make much sense. Citadel investment firm CEO Ken Griffin was disdainful also stating that:

“I don’t see the economic basis for cryptocurrencies. I understand how to think about exchange rates around the world. (…) I don’t know how to think about what is actually a digital token.

However, the race to $1 trillion was predicted by Bloomberg’s senior commodities expert, Mike McGlone, in his Tweeter on November 16, 2020, where he called it “the digital version of gold”.

What do the experts think today?

Interestingly, some of the pundits previously intrigued by Bitcoin’s success are now changing their tune, with JPMorgan stating that Bitcoin and crypto are now the preferred “alternative asset class”, overtaking real estate.

Meanwhile, Ken Griffin’s Citadel Securities, one of the world’s largest market makers, has teamed up with Fidelity Investments and Charles Schwab Corp (NYSE:SCHW) to create a crypto offering that would broaden access of their customers to digital assets. .

McGlone remains bullish on Bitcoin, expressing his view that it will outperform in the second half of 2022, despite the first-half market decline reportedly spilling over into the second half, as Finbold reported in late July.

As it stands, Bitcoin is currently trading at $22,969, down 1.54% on the day, but up 9.84% over the previous seven days, according to data from CoinMarketCap.

Daniel C. Williams