Market Measures

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The Bitcoin Market

Market Measures

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With +600% returns this year, Bitcoin and cryptocurrencies have been on everyone’s radar. Tune in today as Tom and Tony discuss the Bitcoin market!

Bitcoin’s market cap is currently $120B and growing rapidly, increasing roughly $50B since August. Currently, there are 16.7M BTC in circulation and 7200 BTC are created (mined) every day. This new creation of Bitcoins puts deflationary pressure on the currency. The amount of Bitcoin caps out at 21M BTC in the year 2140; creation of bitcoins declines exponentially as 2140 approaches.

One of the benefits of Bitcoin is that it has a very low correlation with almost all other assets. It has a slight positive correlation (0.25) with NVDA, which produces hardware used to mine Bitcoin. Bitcoin does allow for fractional shares currently, but to trade the product you must put up the full notional amount. When comparing this to the futures market where we can take on much more leverage, it doesn’t make sense to trade Bitcoin currently. The CME is looking to launch futures on Bitcoin, allowing traders to reduce buying power and eliminate counter party risk.

Tune in to hear Tom and Tony’s thoughts on the Bitcoin market!

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