Is Crypto’s $3.88T market capitalization an overvaluation of the industry?

It's not uncommon for people to argue that the cryptocurrency market is overvalued, especially considering that there are hundreds of memecoins trading at millions in market capitalization, achieving this at faster times than most traditional companies with actual products or services with revenue.

The industry is widely considered a market for speculative trading and investment, and has many times been termed a hub for criminals.

The big question is: are these arguments right? Is the crypto industry overvalued?

When people think about crypto projects being overvalued, they generally are judging by the millions of memecoins that shouldn't even exist but they fail to understand a lot of things.

For starters, Bitcoin has a market capitalization of $2.24T which means that it makes up 57.8% of the industry’s combined value. Ethereum's $501.9B market capitalization means it makes up 12.92% and that brings the top 2 leading crypto projects and assets to 70.72% market dominance, leaving less than 30% of $3.88T for an industry with over 18,800 recognized assets, excluding millions of memecoins.

The leading top 10 crypto assets by market capitalization make up $3.53T, which is 91% of the previously stated $3.88T combined market capitalization for the cryptocurrency industry.

Evidently, this proves the statement of overvaluation flawed because not only is 10 assets controlling over 90% of the valuation but said assets are also key players in terms of solutions offered.

Personally, there's only two assets in the top 10 that I can say I'm not sure why they are there, everything else on that list are worth their valuation.

People think about memecoins and think that they hold much of the industry's valuations simply because a few of them hit several millions and sometimes billions in market capitalization, but data shows that as of today, out of over 156k tokens deployed on Pumpfun, less than 400 tokens have a market cap above $100k and the entire memecoins market on Pumpfun is worth $4.16b today, which is just 0.106% of the combined crypto markets capitalization.

The assets that are considered the worst of shits make up a tiny fraction of the industry. The top 10 assets make up over 90% of the industry’s valuation and are deserving of this, given what unique ecosystems they serve and what comes out of that.

There may be a lot of shitty projects in this market and millions of memecoins that shouldn't exist, perhaps, but none of that makes the industry overvalued because when you look at everything else, you see that $3.88T is actually an undervaluation, especially since we are dealing with the single most important tech of this generation.

Posted Using INLEO