RBC: The cryptocurrency market could one day be worth $10 trillion

RBC Capital Markets analysts Mitch Steves and Amit Daryanani believe that this is just the beginning of the cryptocurrency boom.

“On a near-term basis we think it is quite difficult to make price statements which is why we are flagging the move now in the case that it sustains,” Steves and Daryanani wrote in December 12 research note. “Longer term, we think crypto currencies are here to stay and will likely become a large market (our long-term estimate for the Crypto Currency space is in the $10 Trillion dollar range versus ~ $500B today).”

The analysts argue this is great news for semiconductor company Nvidia (NVDA). Companies like Nvidia that make GPUs (graphic processing units) have benefitted from the cryptocurrency space, particularly because of the interest in mining. GPUs are used to mine some of these cryptocurrencies.

In recent weeks, there’s been a frenzy in the cryptocurrency space as new investors have rushed in pushing prices of bitcoin (BTC-USD), Ethereum (ETH-USD), Litecoin (LTC-USD), and other cryptocurrencies to record highs. In the last week alone, bitcoin has jumped nearly 28% to last trade around $16,730, while Litecoin has surged 226% to last trade around $315, according to Yahoo Finance’s cryptocurrency tracker.

Bitcoin presently has a market cap of $280 billion, while Ethereum has a market cap of $64.7 billion. Other cryptocurrencies have much smaller market caps. Bitcoin represents about half of the entire space’s market capitalization. Some have speculated that cryptocurrencies could be approaching bubble territory, potentially destabilizing the economy and the markets in the event of a crash.

Capital Economics pointed out in a recent analysis that bitcoin’s market cap is still too small to have any major economic impact should it implode. In that analysis, they noted that a complete bitcoin crash would be the equivalent of just a 0.6% fall in U.S. stocks.

Source : finance.yahoo