Forget Bitcoin, what about Ethereum — why is it worth $25 Billion?
The Java Virtual Machine (JVM) is known for its software programming ideals of write-once-run-anywhere concept. Ethereum piqued my interest when it proclaims to be a distributed virtual machine, capable of deploying Distributed Apps (DApps) in its Ethereum Virtual Machine (EVM). The EVM draws correlation’s with the JVM, except it’s run-everywhere.
When I dug deeper into the EVM, it blows my mind on how much people are valuing Ether, Ethereum’s cryptocurrency, at over $270 each ETH (the Ethereum currency symbol). This puts the supply of Ether at nearly $25 Billion U.S. Dollars . That’s saying people are confident that somewhere in the near future, Ethereum is going to displace the global flow of money, much like the U.S. Treasury issued USD money supply, by that amount.

The United States Money Supply, called M0 (M-zero) in 2017 is around $3.8 Trillion, with a GDP of $18.57 Trillion. Hence the turnover rate of the M-zero money supply is $18.57 ÷ $3.8 ~ 5 multiples. If we use this same multiple, that means the valuation of Ethereum, with it’s Ether blockchain supply is worth $25 Billion, that implies Ether will power $125 Billion worth of commerce (GDP) of world! So if you map this to the $75 Trillion in Worldwide GDP, this is saying future investors are expecting 0.17% of the world’s commerce be done in Ethereum in some shape or form. Yup, that’s $17 for every $10,000.
That’s just Ethereum. Bitcoin’s BTC supply surpassed $53 Billion, telling us that $35 out of every $10,000 will be transacted in Bitcoin. Ethereum is considered an alt coin. There’s another alt coin, Ripple, at a distant third, with its supply nearing $7 Billion in XRP (Ripple’s cryptocurrency token symbol) and promises for borderless transaction payments.
There’s over 800 alt coins, where the top 100 totals up to around $106 Billion, so it’s not too alarming. If the futures investors are right, and if they play out like how Wall Street investors price equities 4 years out in the future, we should watch Ethereum closely to see whether it actually will transact $17 for every $10,000 in global commerce in the next 4 years.
*Sources: The U.S. Money Supply (M0) and Gross Domestic Product (GDP) sourced from Trading Economics. WorldWide GDP sourced from World Bank
