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As you know, Bitcoin is trading around 1700$+ forming the new highest hight ever.
what we can ask to ourselfs is...
in how much time is it happened ?! well, on the 24th of march the price was just 935$.
So, it has double its value.
The incredible thing is that Bitcoin has the largest market cap and in other words it means that we can spot a massive amount of demand on this movement, why?
it's pretty easy to turn a low cap cryptocurrency, or if your prefer a financial asset, with this features (low cap) to double its value due to the small quantity of money in it.
It's not the case of Bitcoin of course.
Imagine market cap as a metric that show us the greatness of an asset, so the more is huge and the more this asset is held from investors. it's just the amount of shares, or coin in this case, multiplied by the current market price.
Now, apply this concept to the previous ascertain.
we see now that market cap passed from 20 billion on the end of march to 53 billion in these days.
What is the difference between a common stock and a currency in this case?
well, both could be traded of course but would you accept as payment method a shares of XYZ company?!
Maybe yes, ok... but can you go to the supermarket around the corner and buy a donut?! No.
It's fantastic. Why?
A company produces good and services and then it sells this products on the market (the real one).
So who invest in this kind of assets has potentially a limited field of earnings:
depends on companys' sector, growth expentancy etc etc.
Furthermore this company could only get a little portion on world's money in its financial statement.
The most important thing is that every company trasform simply their goods in liqudiity, money.
Can you understand better now?
So, the growth of a currency is not comparable to the growth of a company.
Money is the liquid goods, is the asset that allow you to exchange value and transform it into a specific good.
ok,ok. maybe you don't belive me. let's take an example.
Look at the daily volume of the forex market and stock market.
...stay tuned, an hug ;)