The market valuation of Ethereum has gone past the market capitalization of many large and famous companies like Nestle, P&G, and Roche as the market cap of the crypto asset reaches the value of $382 billion, which is its newest high.
Ethereum tops market cap of humongous corporations
The price of the ETH token has gone up by over 200% since the start of this year alone, hence the new significantly higher market cap of $382 billion. This astonishing new market cap has pushed the Ethereum network’s value over the market cap of many large corporations, like $326 billion valued by Procter & Gamble’s and $308 billion valued PayPal.
The value of the market cap is calculated by multiplying the most recent trading price of the crypto asset by the total amount of coins present, regardless of whether they have been moved or not. This is why it does not often reflect the average price on which most of the investors had made their transactions.
According to the investors from the traditional finance models, the value or market cap is assessed by comparing valuations and multiples. These multiples are most often calculated in the form of total sales, earnings, and market share. If the same metrics are to be applied to the crypto assets, which have multiple use cases, it would make no sense and will also create discomfort and uncertainty.
ETH is very difficult to evaluate
There is not a hard and fast metric for evaluating the potential of Ethereum and comparing it with its price. The crypto asset is multi-faceted and works both as a digital store of value and performing its functions as the token which is needed to get access to the Ethereum network.
This is why a person should always consider the tokens deposited in the exchanges or the percentage changing hands effectively when trying to compare different asset classes. Another important factor that should be kept in mind is the existence of derivative markets, which allow institutional investors to bid against the price of an asset. Although the merits of the comparison between the market cap of various asset classes are very debatable, they usually work in the same way for stocks, commodities, and mutual funds, unlike crypto assets.