Two years ago, the entire cryptoasset market had a value of $9 billion. Had it been a public company, it would barely have cracked the S&P 500 index. Fewer than two years later, the cryptoasset market is $300 billion in size, roughly double the market capitalization of RBC, Canada’s largest lender.
The explosion (and recent pull-back) of value in cryptoassets like bitcoin and ether has captured the imagination of developers, and the attention of the media, governments, central banks, the investing public, and regulators. It has made enthusiasts euphoric, Nobel laureates skeptical, and old-school billionaires dyspeptic. Charlie Munger of Berkshire Hathaway went so far as to call bitcoin “noxious poison.” Is there any other kind of poison?
To be sure, there is a lot of hype in this market, and the industry must confront such implementation challenges as scaling technology and regulatory uncertainty. But beyond the hype and mania, something profound is happening—the creation of an entirely new digital asset class.