The total value of all cryptocurrency assets has just exceeded US$3 trillion ($4.06 trillion), according to Bloomberg News. It is such a big number that it needs some context to be meaningful. Consider Microsoft Corp and Apple Inc, which have market capitalisations that recently topped US$2.5 trillion. So, the entire crypto sector is around 20% more valuable than the equity of the two biggest tech companies.

The previous crypto bull run peaked at the end of 2017 at about US$800 billion, also about 20% higher than Microsoft and Apple at the time. Over the following year, crypto crashed almost 90%, while Microsoft, Apple and the Nasdaq 100 Index did not change much. By December 2018, crypto was worth only a bit more than 10% of the largest tech companies. But over the next three years, crypto recouped the lost ground and is back at its peak valuation compared to tech companies.

Analysing crypto valuation is difficult. There are three main approaches. One is to consider the sector like a tech company. There are thousands of crypto ideas out there, generating useful services. Some of them, like peer-to-peer financial services and smart contracts, are traditional services that crypto can arguably deliver cheaper and better than centralised finance. Others are entirely new end-user services, or are crypto-to-crypto, meaning things that do not deliver services directly to consumers but allow consumer-facing crypto to operate better.

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