Are cryptocurrencies in a bubble and astronomically overpriced? Or is the bubble only just beginning and cryptocurrencies have plenty of room to run before their true value is realized? In trying to decide between these two narratives I have been searching for mental models with which to gain some perspective. At the very least I want to establish some mental reference points and survey the terrain of various related market caps.

Each cryptocurrency ultimately seeks to displace existing market share from existing systems. I have crudely lumped together the following use cases

Financial Services / Banking
Store of Value / Currency
Distributed Compute / Dapps

All numbers are in Billions of US dollars. Let me know if there is anything that I should add to the list. Who else stands to lose market share to the crypto currencies?

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Cryptocurrencies:

*updated as of Jan-16 due to crazy price action

TOTAL cryptocurrency market cap: $701 479

Bitcoin $237 $177 Ethereum $ 127 $92 Ripple $ 71 $39 Bitcoin Cash $ 41 $28 Cardanao $ 22 $14 Litecoin $ 13 $9 NEO $ 12 $8 NEM $ 13 $7 Stellar $ 11 $7 IOTA $ 10 $6 EOS $ 9 $6 Dash $ 8 $5

Financial Services / Money Transfer

Global Financial Sector (2011 est): $11,000 (source) US Financial Sector: $8,300

Top Banks Globally: (source) JP Morgan Chase (JPM)                    $298 Wells Fargo (WFC)                        $273 ICBC                                     $245 China Construction Bank                  $204 HSBC (HSBC)                          $165 Citigroup (C)                            $164 Agricultural Bank of China             $156 Bank of China                          $150 Bank of Australia                        $112 Banco Santander                           $96 Goldaman Sachs (GS)                     $93
Payment processors / Value Tranfer
Visa (V)                                 $272 Mastercard (MA)                          $171
Paypal (PYPL)                           $96 First Data Corp (FDC)                    $16 Global Payments Inc  (GPN)              $16 Square (SQ)                               $11 Western Union (WU)                        $10

Currencies / Store of Value

All the worlds Gold: $7,000 Total US Dollars: $13,800 Total Euros (in US dollars): $13,745

Data Centers / Distributed compute:

Equinix (EQIX) $34 Digital Reality Trust (DLR) $22 Cyrus One (CONE) $5 Global Switch (SWITCH) $4 Dupont Fabros Technology (DFT) $3 Amazon (AMZN) $629* *AWS accounts for 10% of Amazon revenue
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Conclusions and Thoughts

- The total crypto market cap comes in at $712 Billion. At 6.5% of the global financial system this seems a little steep given the current utility value of this technology. However it is not too far fetched given how quickly the technology is maturing. Many speculative dollars are chasing the handful of platforms that will succeed and most will fail.

- The third largest bank ICBC has a similar market cap to Bitcoin. If you had enough capital, would you rather own ALL of Bitcoin or ALL of ICBC?

- For the price of Bitcoin Cash you could own half of Paypal. Which would you chose?

- Overall I am surprised: I thought that the market caps of the crypto currencies would be out of line by several orders of magnitude. But after comparing the numbers they seem a little steep, but not wacky.

- Check out this awesome visualization of value around the world. http://money.visualcapitalist.com/worlds-money-markets-one-visualization-2017/