- Bitcoin’s market capitalization surpassed $1.4 trillion on Monday, higher than silver’s $1.3 trillion market cap, as the cryptocurrency hit a new record high.
- The rally was fueled by the successful launch of Bitcoin ETFs in the US, which provided validation from professional investors and easier exposure for mainstream investors.
- Bitcoin’s limited supply of 21 million coins makes it an attractive hedge against inflation compared to silver, which can be mined endlessly.
Bitcoin jumped to a record high on Monday, fueled by continued positive momentum of the spot ETFs. This propelled Bitcoin’s market capitalization past silver’s market capitalization.
Bitcoin Market Cap Reaches New Milestone
Bitcoin’s market capitalization surged past $1.4 trillion on Monday, surpassing silver’s market capitalization of $1.3 trillion.
The cryptocurrency hit a record high of $66,930 on Monday. This was fueled by the successful launch of the first Bitcoin ETFs in the United States last week. The ProShares Bitcoin Strategy ETF saw massive trading volumes on its debut.
The ETF launch provided validation of cryptocurrencies in the eyes of professional investors and asset managers. It also provided an easier way for mainstream investors to gain exposure to Bitcoin.
Bitcoin has more than doubled in value this year amid greater institutional adoption. The latest surge comes only three weeks after Bitcoin hit $1 trillion in market capitalization for the first time.
Silver Slips in Value
Silver has long been seen as an alternative to gold for investors seeking a hedge against inflation and currency debasement. But silver has underperformed major cryptocurrencies as well as gold this year.
While Bitcoin is up over 100% year-to-date, silver is down over 6% so far in 2021.
Proponents argue that Bitcoin could continue eating into gold and silver’s market share, as more investors bet on the digital asset’s potential as a store of value and hedge against inflation.
Bitcoin’s Limited Supply
One of Bitcoin’s defining features is its limited supply. The cryptocurrency has a fixed supply of 21 million coins, over 18.8 million of which are already in circulation.
In contrast, silver does not have a fixed supply and can be mined endlessly. The fact that Bitcoin’s supply is verifiable and limited makes it an attractive asset to own during times of monetary expansion and debasement.
Bitcoin is often referred to as “digital gold” because it shares some characteristics with the precious metal. But the cryptocurrency’s fixed supply arguably makes it a better store of value and hedge against inflation.
Conclusion
Bitcoin reaching a higher market capitalization than silver is a symbolic achievement that highlights the growing mainstream adoption of the cryptocurrency. As more institutional investors gain exposure to Bitcoin, the rally could continue. However, continued volatility is also expected from the nascent asset class.
