Cryptocurrency Market Cap Vaults Over $600B

It's been another crazy week in the cryptocurrency market, with the total market cap of cryptocurrencies rising to more than $600 billion.

One of the leading cryptocurrencies this week was Bitcoin Cash (BCH), which vaulted more than 60% yesterday when leading cryptocurrency trading platform Coinbase Inc. suddenly announced it was adding trading of Bitcoin Cash to its platform. At the same time, holders of Bitcoin on Coinbase received distributions of Bitcoin Cash from the August fork of the code base, adding liquidity.

The total cryptocurrency market capitalization reached $606 billion on Monday, according to Coinmarketcap.com. There are now more than 1,300 cryptocurrencies in the market. Bitcoin, Ethereum, Bitcoin Cash, Ripple, and Litecoin round out the top five currencies, all of which are up more than 1,000 percent on the year.

In this manic gold rush, some publicly traded companies are taking advantage of investor mania to push up their stock prices. Online retailer Overstock (OSTK) has doubled since it announced cryptocurrency initiatives in the past few months, including the issuing of its own Initial Coin Offering (ICO). MGT Capital Inc. (MGTI), founded by security entrepreneur John McAfee, has doubled in just a week, on the back of its investment in Bitcoin mining and a cryptocurrency portfolio. It recently restructured by exchanging investor debt for equity and it announced the launch of a new plan to secure energy for Bitcoin mining in Sweden.

Other plays in the space look even more opportunistic. Castle Rock, Colo.-based company Riot Blockchain Inc., once a penny-stock biotech company named Bioptix Inc., put blockchain in the company name and relisted as "RIOT," causing the stock to rise from $8 to $37 after its relisting, despite the fact that its blockchain and cryptocurrency activities appear minimal.

Meanwhile, large technology companies with real blockchain technology, such as IBM, can't seem to get much love.

Is it 1999 all over again? In many ways, yes. In some ways, no. The cryptocurrency boom is a different animal because it involves an entirely new financial infrastructure with the assets having no intrinsic value other than their trade-ability. The publicly listed companies involved are few and far between, which mean investors just pile into any available name, including the Bitcoin Investment Trust (GBTC), which is up more than 2,000% on the year and recently traded as high as a 90% premium to the Bitcoin spot market.

For those predicting a crash, I would say that these things tend to carry on a lot longer than people think. In addition, many large technology companies and investment companies are plotting their plans and visions for blockchain and cryptocurrency technology in 2018, which will likely add to the hype. The most interesting development for 2018 will be to look for the emergence of a wider range of legitimate applications of the technology, and possibly more real-world use of cryptocurrencies, including the adoption by major online retail platforms.

(Disclosure: The author owns a variety of cryptocurrency assets including MGTI.)