According to the latest CoinMetrics report, if Bitcoin’s current growth rate can be maintained, the current daily volume of spot markets would require less than 4 years of growth to exceed the daily volume of all U.S. stocks.
The latest CoinMetrics report analyzes Bitcoin’s fragmented volumes
With a resurgence of institutional interest in Bitcoin, cryptocurrency analysis company CoinMetrics expects companies and financial institutions looking to invest in cryptocurrencies to look at their trading volumes first.
In a example From an upcoming piece of research with ARK Invest, CoinMetrics applied different calculation methodologies to Bitcoin’s daily volumes and achieved significantly different results with each approach.
At the spot market aggregation level, which the company is believed to be most attractive to institutions, the report estimates that the trading volume of BTC spot markets on major exchanges in US dollars is quoted at $ 0.5 billion per day.
BTC’s volume figures in various markets. (Source: CoinMetrics)
While this represents a significant increase for Bitcoin, the daily trading volume in spot markets of just $ 4.1 billion is still miniscule compared to the spot volume of other asset classes.
Daily spot volumes for BTC, stock, bond and FX markets. (Source: CoinMetrics)
Miniscule, but with enormous potential
The CoinMetrics report concludes that Bitcoin, in its current state, is most similar in size to a large capitalization stock in size than a separate asset class. This could compel a large institutional investor to see Bitcoin as only suitable for part of a small allocation to alternative assets, the company said, adding that it does not see institutions allocating a separate allocation to Bitcoin in their current state.
However, this may change in the very near future. According to the report, if Bitcoin manages to maintain its historical growth rates, its current daily spot market volume of $ 4.3 billion could exceed the daily volume of all U.S. stocks in less than 4 years.
Forecast for the growth of BTC’s spot volume in the next 6 years. (Source: CoinMetrics)
BTC would also take less than 5 years to exceed the daily volume of all U.S. bonds, which currently stand at $ 893 billion.
“All facets of BTC’s trading volume have experienced exponential growth and, if sustained, will grow to levels comparable to those of the major asset classes,” the company concluded in the report.
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