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100 Billion Dollar Babies

While there is no official measurement of a market bubble, Gadlfy's Stephen Gandel notes that one could be the speed and force of the rise.

Dot-com stocks rose 680% from the beginning of 1996 to the end of March 2000. Bitcoin has risen over 800% in the past year alone, to $6,300 at its peak today...

In that run, it has added roughly $90 billion in value, crossing above $100 billion for the first time on Friday.. and bigger than Goldman Sachs...

But it has taken Bitcoin far lass time than others to join the $100 billion club...

 

Still, as Gadlfy's Stephen Gandel writes, compared with other asset classes, like real estate or stocks, bitcoin is a pimple, which is why some people have convinced themselves that bitcoin can't be in a bubble.

New York City real estate alone is worth more than $1 trillion. There is $8 trillion worth of gold in the world, nearly $15 trillion in Treasury bonds and more than $25 trillion in the U.S. stock market. Bitcoin's mere $100 billion, by comparison, is small.

But that's only part of the equation. New York City real estate is worth 10 times bitcoin, but it didn't pass the $100 billion mark, adjusted for inflation, until the late 1970s, or roughly 310 years after the territory was renamed after the Duke of York. U.S. auto sales didn't reach $100 billion for 60 years. Apple did it in a sprightly 31 years, but that was still four times slower than bitcoin, which clocked in at about seven years. But Apple, unlike bitcoin, produces significant earnings and holds $260 billion in actual cash.

And the bitcoin universe has now drawn in investors in so-called initial coin offerings, chip manufacturers and technology investors in general. If the bitcoin bubble does pop, the value of a lot more than just the cryptocurrency could vanish.