New data by Grayscale Investments reveals a compelling correlation between the exponential growth of the cryptocurrency market capitalization and the upward trajectory of Canadian stock markets. However, as cryptoassets reach unprecedented heights, parallel to the expansion of traditional stock markets in Canada, intriguing ideas are emerging about the interconnectedness of global financial landscapes.
Crypto Market Cap Soars: Data Shows Link to Canadian Stocks
In a captivating plot twist, Grayscale Investments, one of the world's largest crypto asset management companies, recently published in X, drawing parallels between the burgeoning expansion of cryptocurrencies and the Canadian stock market. Furthermore, in its statement shared yesterday, May 11, the crypto asset management company also placed crypto and US dollar-denominated Emerging Markets (EMB) bonds in the same league, causing repercussions throughout the asset industry. cryptography in general. Grayscale and Bloomberg appear to have exchanged an index that compares the crypto market capitalization to that of other bonds and markets in recent years. Let's delve into this index.
Crypto Market Cap Rises to Unprecedented Levels
According to the chart shared by Grayscale Investments, the market capitalization of cryptocurrencies, including stablecoins, has risen to unprecedented levels in recent years. Furthermore, the market capitalization, which initially surpassed Japanese financial stocks in 2018, valuing it at over $500 billion, has continued to rise gradually. Heading into 2021, the cryptocurrency market capitalization has surpassed US high-yield corporate bonds, valued at over $1.5 trillion.
Subsequently, in 2022 and 2024, the total crypto market capitalization surpassed dollar-denominated emerging market bonds, Canadian stock markets, and even global inflation-linked bonds, surpassing the $2.5 billion mark. These data, together, have instilled immense optimism in the crypto community, underscoring the growing global adoption of digital assets. Additionally, it is worth noting that the increase in digital asset market capitalization coincides with this year's much-hyped "bull cycle." bitcoin, Ethereumand numerous altcoins rose in sync as this year began, mostly aligning with the BTC halving frenzy.
Grayscale index
Meanwhile, providing information, Grayscale stated that the Bloomberg Global Inflation Linked Index measures investment-grade inflation-linked government debt from 12 other developed market countries. In contrast, the MSCI Canada Index is designed to measure the performance of the large- and mid-cap segments of the Canadian market. However, with 87 constituents, the index encompasses approximately 85% of Canada's float-adjusted market capitalization.
