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Crypto stocks reach a combined value of $100 billion

Crypto stocks reach a combined value of $100 billion

The combined market capitalization of publicly traded crypto companies has roughly quadrupled this year. The number of publicly traded crypto companies has also increased substantially by 28%.

A new report from CoinShares estimates that public "cryptocurrency pure play companies" were worth roughly $25 billion at the beginning of the year, with mining companies and financial services companies accounting for most of this value.

The report also revealed that 16 crypto companies went public this year, bringing the total to 57. Together, these 57 companies account for a market capitalization of nearly $100 billion by now.

There has never been a year where so many new publicly traded digital asset companies went public, and the year is still ongoing. In 2018, 14 companies went public, and in the years 2014, 2016 and 2017, only 9 went public in total.

The highlight of this year, of course, was the April IPO of the leading Coinbase in the US. Coinshares' report paid extra attention to this, they described the IPO as "the first real large cap pure play in this sector."

During Coinbase's IPO in April, the capitalization of public digital asset companies rose to a record high of nearly $120 billion. In contrast, the sector's combined market capitalization was less than $3 billion at the start of 2020. So in roughly one year, a 4000% increase took place.

The 15 public crypto exchanges now represent 62% of the sector's combined capitalization with roughly $59 billion, followed by 19 financial services companies with nearly $20 billion and 20 mining companies with $10 billion.

Listed mining companies have shown the strongest year-to-date (YTD) increases with an average of 121%, followed by crypto financial services companies with 105% and exchanges with "only" 34%.

The crypto companies that went public in 2016 have made the biggest gains in share price this year, with gains of roughly 140% on average. The 2018 companies are in second place with YTD gains averaging 115%, followed by 2017 at about 110%, and 2019 at 95%.

2020 companies are currently up just 19% on average, with the report suggesting that "most of these companies were already listed at higher valuations."

CoinShares also notes that the average market capitalization of public crypto companies has increased dramatically this year from $1.1 billion in 2019 and 2020 to $3.8 billion today.

The liquidity of crypto stocks has also increased significantly this year. At the end of 2020, most stocks did not even have a volume of $500,000 per day, but things are different now.

Only two of the 23 listed crypto companies at the end of 2019 were considered liquid, but this figure jumped to 20 out of 41 in December 2020, and 48 out of 57 since July 2021.

So it is clear that the price gains in crypto are also having a big effect on crypto stocks, which seems logical. The gains may not be as large as some cryptocurrencies have seen, but a stock does offer other benefits, such as dividends and lower volatility.

Luc Smits van Oyen
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