The combined market caps of Bitcoin and Ethereum now equal South Africa’s GDP.
Following Bitcoin’s price breaching $14,000, its market cap increased to $254 billion.
Ethereum has a market cap of $42 billion, which means their combined market cap is $296 billion.
This is roughly the same as South Africa’s GDP in 2016, which was $295 billion.
Economist Mike Schussler said cryptocurrencies as a whole have gone from a market cap of $14.3 billion to $401 billion over the past year.
He said cryptocurrencies have added the total GDP value of South Africa, Namibia, Botswana, Lesotho, and Swaziland to their market cap, and have increased 28-fold in a year.
The tremendous growth does not mean Schussler endorses Bitcoin as a quality investment, however.
“Most of these currencies mean nothing, and even the most famous one cannot buy you an ice cream,” he said.
He said people are holding their Bitcoin because they fear missing out on this “great investment”.
“Nothing but tulips have increased more than 40-fold in a three year period and certainly nothing increased 138 times in less than five years without adding any value but price changes,” he said.
People also cannot decide if Bitcoin is an investment or currency.
“It costs 250-times more than Visa to transact. Some currencies have been hacked. It is volatile and only offers price as a return,” he said.
He said cryptocurrencies do not have scarcity as an underlying basis as splits happen quite often, and the number of coins double with every split.
“Once the Chicago Mercantile Exchange lists the options, it does not mean many more sales of Bitcoin, but that people can also make money shorting it.”
“I would short Bitcoin within a day or two of listing on the CME.”
Schussler said he knows of no other currency where strangers email you or message you and try to convince you to buy it.
“That alone is a warning sign. Do not invest just because a price is going up. Invest because there is value,” said Schussler.