When did Bitcoin Achieve a $1 Billion Market Cap?

Bitcoin first achieved a billion dollar market cap on March 28th, 2013.

Why is This Market Cap Milestone Important?

Arguably, it isn’t.

In the venture capital investing world, when a company reaches a $1 billion market cap, it is called a ‘unicorn’, because it is so rare for a company to achieve this valuation. Rare, just like a unicorn.

So…when bitcoin’s market cap reached $1 billion, it could be considered a kind of ‘unicorn investment’.

Since bitcoin, there have been many more crypto 'unicorns'.

That said, valuing companies and valuing currencies are not really the same thing.

Many have pointed out why applying a market cap to any currency (digital or otherwise) is silly.

Criticisms

One reason many analysts think it’s inaccurate to use a metric like market cap to value a currency is because equity in a company does not function the same as ownership of a currency.

When you own equity in a company, you really own a stake in the future cash flow of that business.

If a company is worth a billion dollars, that says something about the likelihood that the business will create future cash flow for you to take part in.

But a currency on its own, does not create cash flow. The only way to earn profits on it is to buy it at a low price and hope others buy it after you do, increasing the price.

Therefore, the market cap of the currency does not tell you nearly as much about its value when compared with equity in a business.

Another criticism some make is that the value of a currency is mostly based on the inflow of capital to the currency.

This is a less serious criticism since you could also level this criticism as traditional business equity as well.

Defenses

Defenders of using the metric will point at that, while some of the criticisms may be true, it doesn’t necessarily mean that the metric means nothing. Market cap is just the current price of the asset multiplied by the number of shares or units in circulation.

Market cap, at the very least, gives a good snapshot of the total valuation of a currency. That alone is useful.

So Why Do We Care?

The reason one might celebrate this market cap milestone even if it has issues is because other people care about it.

It’s also not totally without merit. A billion dollars of value is still a billion dollars of value, it just may not be as impressive as it would be for a company to achieve.