May 16, 2018
By: Brittan Hawken, JLL
Cryptocurrency and blockchain, the ledger technology behind most cryptocurrency, is having a dynamic and disruptive effect on many aspects of the commercial real estate sector. In a series of blogs, we take a look at the latest developments in crypto and blockchain and delve into the areas of commercial real estate where they are having the biggest impact.
You know an investment sector is taking off when someone announces an index to track performance. That happened this week when Bloomberg and Galaxy Digital Capital Management launched the Bloomberg Galaxy Crypto Index (BGCI).
“But, even by conservative reckoning, there are more than 150 cryptocurrencies in circulation with market caps in excess of $100 million.”
As of May 10, 2018 there were more than 1600 cryptocurrencies in circulation globally and the total market capitalization of these currencies in US dollars was over $427.73 billion. Of course, many of these digital currencies are small and because of the way they are traded it’s tough to assess values or even trading volume. But, even by conservative reckoning, there are more than 150 cryptocurrencies in circulation with market caps in excess of $100 million.
BGCI measures the performance of 10 of the largest cryptocurrencies, the most recognizable of which to most of us is probably Bitcoin. Bitcoin wasn’t the first digital currency but it is the most established cryptocurrency in use today, even though it is still less than 10 years old. Bitcoin has a market cap of more than $155 billion and it is estimated that almost $7 million a day is traded. One bitcoin is worth around $9,000.
Let’s just put those numbers in some perspective: the U.S. REIT sector, which traces its origins back to 1971, has a universe of 226 or so REITs and a market cap of just over $1 trillion. In less than a fifth of the time, cryptocurrency has become more than a third the size of the REIT market and is growing at a far faster pace than the REIT sector.
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