The value of a single bitcoin has skyrocketed this year, and hit $874 today (Dec. 22). It’s not the highest price ever for bitcoin, which traded at $1,165 in November 2013. But with the 2016 rally, the cryptocurrency has achieved a different but related milestone: The value of all bitcoin in circulation is now at an all-time high.
This measure is generally referred to as “market capitalization” by crypto traders. It’s derived from the amount of bitcoin mined to date and the current price. It provides a measure that functions roughly like a publicly traded company’s market cap—a gauge of how the market values the entire enterprise.
All the bitcoin in circulation is now valued at about $14 billion, compared to Twitter’s market cap of $12 billion, as Union Square Ventures associate Joel Monegro pointed out:
Bitcoin’s current market cap is just above its previous all-time high of $13.9 billion, achieved on Nov. 30, 2013. At the time, there were about 12 million bitcoins in circulation. Today, that number has grown to more than 16 million coins.
Some bitcoin watchers, like South African entrepreneur and venture capitalist Vinny Lingham, have argued that market cap can be a more useful measure of bitcoin’s value than the price per coin, since the total number of coins increases constantly. He observes that the price of a bitcoin is not adjusted for the total supply of coins in circulation, unlike a stock split of a publicly traded company.
The supply of coins grows steadily because of the way bitcoin is programmed. Each miner introduces new coins to the supply at a rate of 12.5 coins roughly every 10 minutes. This adds up to over 1,700 new bitcoins per day. The total supply of bitcoins is capped at 21 million.
As always with bitcoin, its price movements remain something of a mystery. Market analysts, like Charles Hayter of cryptocurrency metrics site CryptoCompare, point to macroeconomic uncertainty, driven by Trump’s cabinet appointments; the impact of Brexit; and China’s yuan devaluation as contributing factors. India and Venezuela’s crackdown on some forms of cash has also seen bitcoin volumes in those markets soar. And bitcoin’s use as a low-cost remittance channel is rapidly gaining traction in major remittance markets like the Philippines.
Bitcoin’s already had a stellar year by most measures, and it looks like it will keep that hot streak going in the final days of 2016.