As Bitcoin presented a rally from just under $25,000 to more than $27,300 at press time in just over a day, the asset's market capitalization has crossed the half-trillion mark. At the time of writing, Bitcoin's market cap sits at $508 billion.
Bitcoin's market capitalization is calculated by multiplying the circulating supply of bitcoin with the price per bitcoin.
Only on December 14th, Bitcoin broke its previous market cap record as it reached $330 billion.
Bitcoin's market capitalization has been increasingly used as an indicator of its prominence in comparison to other stores of value, primarily gold. Gold's market capitalization currently stands at around $10 trillion. Given its similarities with Bitcoin in terms of its ability to hedge against inflation and preserve wealth, gold has become more widely cited as a benchmark for Bitcoin's market for potential adoption.
It further appears that a growing number of investors is seeing additional benefits in Bitcoin when compared to gold. In a video published by Bloomberg TV on December 16th, Guggenheim Investments CIO Scott Minerd stated that the firm's fundamental work showed "Bitcoin should be worth about $400,000," citing its relative valuation to gold as part of the reason why: "Bitcoin has a lot of the same attributes [...] and at the same time has an unusual value in terms of transactions."
In an interview in early December, hedge fund manager Paul Tudor Jones commented that $500 billion would be the "wrong market cap" for Bitcoin "in a world where you’ve got $90 trillion dollars of equity market cap, and God knows how many trillions of fiat currency."
Jones further reinforced the narrative of Bitcoin as "digital gold," which has won many supporters this year, in imagining a future scenario similar to that of gold:
"It’s going to be a lot like the metals complex where you have precious crypto—that might be Bitcoin, the first crypto, first mover in the world. It’s so compressed; it has that historical integrity within digital currencies that it will always have. Because of its finite supply, that might be the precious crypto."
Bitcoin's market cap currently measures around four percent of that of gold, according to the BTC Times' Bitcoin to Gold ratio.