Ethereum joins the $200 billion club — But is it worthy?


Ether (ETH) is up 150% in 2021, driving its market value up to over $ 200 billion. Most traders focus on the unit price, although it is quite arbitrary, and thus miss relevant milestones and comparisons.

Ether and Bitcoin’s performance to date. Source: digital asset data

Investors, especially those from the traditional industry, are used to compare multiples of profits, sales and market share. Meanwhile, when evaluating a cryptocurrency with multiple use cases, there is no single metric to measure its potential. Ether may simultaneously function as a digital store of value while acting as a token required to access the Ethereum network.

ETH’s market value, in $ 1 billion. Source: TradingView

To illustrate the myopia caused by standardized prices, Cardano’s ADA is less than $ 1, even though its market value is over $ 26 billion. Therefore, the outstanding number of coins is equally important. On the one hand, COVER has a flat rate of around $ 1,600, although its market value is still less than $ 100 million.

Ranking of the largest global assets by market value. Source: 8marketcap.com

Although the advantages of comparing the assets of different classes side by side are debatable, market capitalization works the same way for commodities, stocks and mutual funds. Some additional metrics are often used to analyze asset volume, including free float, the amount actually available for trading, along with average trade volume.

According to 8marketcap.com, Ether’s market cap has recently exceeded that of Novartis ($ NVS), AT&T ($ T), and Cisco ($ CSCO). Hence, it is only fair to make general comparisons with those companies as investors may choose one or the other.

Switzerland-based Novartis International AG was originated in 1857. With more than 110,000 employees, the pharmaceutical company recorded a net income of $ 8.1 billion in 2020. So, comparing a 165-year-old company that relies heavily on research, production, and distribution with technology A based protocol that doesn’t even have servers or development teams seems silly.

On top of that, companies face the risk of creating additional equity, unlike Ether’s fixed-offer calendar. Similar issues arise with regard to taxes, liabilities, and potential government oversight. However, the decentralized protocols are more insulated from these risks, which warrants a much higher evaluation.

Cisco Systems was ordered to pay $ 1.9 billion in a patent infringement lawsuit in October 2020. In January 2021, a Seattle company filed a lawsuit against AT&T for at least $ 1.35 billion. There are countless ways in which a shareholder might be surprised because one relies so heavily on third parties.

In conclusion, while it makes sense to compare the market value of different assets, the purely technological nature of cryptocurrencies provides a much broader upside.

The opinions and opinions expressed herein are solely of those of The authors They do not necessarily reflect the views of Cointelegraph. Every investment and trading movement involves risks. You must do your own research when making the decision.