This is not the first time that Bitcoin has passed this trillion dollar threshold, but this time around other factors are in play that could trigger the next trillion dollar milestone to happen at a more frequent and rapid pace.
Bitcoin's recent trillion-dollar market cap threshold, is now outpacing Ethereum by a three-to-one margin, marking a significant milestone in the cryptocurrency space. This development underscores Bitcoin's foundational principles which include the release of personal finance from traditional third-party dependencies, government intervention, and the achievement of a personal democratic financial system. The approval of Bitcoin Exchange Traded Funds (ETFs) by the Securities and Exchange Commission (SEC) further integrates Bitcoin into mainstream financial frameworks, offering traditional lenders and security agents a gateway to cryptocurrency markets. However, this mode of access, while seemingly convenient, diverges from the true essence of Bitcoin ownership and its core properties.
The recent surge (132.53% in 1 year) in Bitcoin's market value, outperformed every major traditional stock by a long shot, establishing its trillion-dollar market cap and beyond, is not just a numerical milestone but a validation of its core philosophy. Bitcoin is proving to be a viable alternative to conventional financial systems, emphasizing the importance of decentralization and personal financial sovereignty. Bitcoin stands as the vanguard of cryptocurrencies, offering a blueprint for a financial system that operates independently of centralized authorities.
The SEC's approval of Bitcoin ETFs is bridging the gap between traditional financial markets and the seemingly complex world of cryptocurrencies. It allows the already experienced investor to gain exposure to Bitcoin's value without directly engaging with the cryptocurrency, akin to how gold and silver ETFs function. While this development opens doors for investors unfamiliar with or hesitant about direct cryptocurrency transactions, it introduces a layer of abstraction from the foundational principles of Bitcoin.
Investing in a Bitcoin ETF offers an illusion of Bitcoin ownership without partaking in the actual benefits of direct interaction with the Bitcoin network. True ownership of Bitcoin involves engaging with its decentralized ledger, embracing the security provided by its immutable records, and participating in its mining-based democratic voting system. Direct ownership means full control, no middle man, no fees to ETF handlers and the ability to get in and out as you please 24 hours a day.
The distinction between owning shares in a company that holds Bitcoin and holding Bitcoin directly is profound, with the latter offering unparalleled control and autonomy over one's financial assets.
In the past few years Bitcoin has been a key investment for traditional corporations to hold on their books. The below list has 10 such companies and their BTC holdings as of March 2023, note the price of BTC has gone up considerably and the list of companies has been known to purchase more during the past year.
MicroStrategy Inc. - Under the leadership of Michael Saylor, MicroStrategy has become synonymous with corporate investment in Bitcoin. The company holds over 129,000 BTC, making it the largest known corporate holder of Bitcoin.
Tesla, Inc. - Elon Musk's Tesla made headlines in February 2021 when it purchased $1.5 billion worth of Bitcoin. Although it sold a portion of its holdings, Tesla still owned around 9,720 BTC as per their latest disclosures.
Galaxy Digital Holdings- A diversified financial services and investment management company in the digital asset, cryptocurrency, and blockchain technology sector, founded by Mike Novogratz. Galaxy Digital Holdings had reported holding 16,402 BTC.
Voyager Digital Ltd - A crypto-asset broker that provides retail and institutional investors with a turnkey solution to trade crypto assets, reported holding approximately 12,260 BTC.
Square, Inc. (now Block, Inc.) - Jack Dorsey's company, known for its payment and financial services, has invested in Bitcoin as part of its commitment to the cryptocurrency space. Square holds about 8,027 BTC.
Marathon Digital Holdings - A digital asset technology company that mines cryptocurrencies, focusing on the blockchain ecosystem and the generation of digital assets. Marathon holds approximately 4,813 BTC.
Hut 8 Mining Corp - One of the oldest and largest Bitcoin mining companies in North America, Hut 8 holds about 5,242 BTC, emphasizing its commitment to holding the majority of its mined bitcoins.
CoinShares - A digital asset investment firm that manages and invests in digital assets and blockchain technology. CoinShares' strategic holdings include approximately 6,000 BTC.
Riot Blockchain Inc. - Focuses on cryptocurrency mining with a significant investment in Bitcoin. Riot Blockchain reported holdings of around 3,995 BTC.
Bitfarms Ltd. - A global Bitcoin self-mining company, Bitfarms holds about 4,300 BTC, showcasing its investment and operational focus on Bitcoin.
Bitcoin has several unique properties which include:
Decentralized Ledger Bitcoin operates on a blockchain, a decentralized ledger that records all transactions across a network of computers. This ensures transparency, security, and resistance to censorship.
21 Million Cap The total supply of Bitcoin is capped at 21 million coins, a policy that mitigates inflation and mimics the scarcity value of precious metals like gold and silver.
Mining-Based Democratic Voting Bitcoin's network security and transaction verification rely on mining, a process that demands computational power to solve complex mathematical problems. This mechanism serves as a democratic voting system, where miners' efforts to secure the network are rewarded with new Bitcoins and transaction fees.
Immutable Records Once a transaction is recorded on the Bitcoin blockchain, it cannot be altered or deleted, ensuring the integrity and permanence of financial history.
Pier to pier Security The decentralized and cryptographic nature of the Bitcoin network makes it highly resistant to attacks, ensuring the safety and security of assets.
Bitcoin's surpassing of the trillion-dollar market cap is a monumental achievement that reaffirms its status as a cornerstone of personal financial freedom and decentralization. The introduction of Bitcoin ETFs presents a new pathway for traditional investors into the cryptocurrency space, albeit at the cost of forgoing the full spectrum of benefits that direct Bitcoin ownership offers.
Understanding and engaging with Bitcoin's unique properties—its decentralized ledger, fixed supply cap, democratic mining system, and immutable records—is essential for anyone looking to fully realize the transformative potential of this digital currency. As Bitcoin continues to evolve, it remains a beacon of financial autonomy and a force against the vulnerabilities inherent in traditional financial systems. Unlike our current monetary system, Bitcoin is borderless and open 24/7.
What's in your wallet?
Disclaimer: It is essential that anyone new to Bitcoin and cryptocurrency learn more about the protocol. Digital assets like Bitcoin are our future of trade and the monetary system for the Information Highway. I have been using Bitcoin for 10 years and helping individuals onboard and learn. The information I write about has been through experience in buying, trading and using Bitcoin and other cryptocurrencies. I do my own research for my articles. This is not financial advice just gathered knowledge from a power user.