The market cap of the Ethereum network has risen to a gigantic figure of $ 337 billion. After this rise, Ethereum is now ahead of big companies such as Nestle and P&G.

Ethereum Continues With Rises

Ethereum (ETH) price rose more than 200% in 2021. This increase has turned Ethereum into a $ 337 billion giant.

This impressive figure made the Ethereum network worth $ 326 billion, ahead of Procter & Gamble, with a value of $ 308 billion.

The market cap figure is obtained by multiplying the last transaction price by the total number of unpaid cryptocurrencies, regardless of whether they were moved or not. As such, it rarely reflects the average price most traders are trading at.

For traditional finance investors, ‘value’ is evaluated by comparing multiples and valuations. These are usually calculated as earnings, sales and market share, and trying to apply these same ‘value’ metrics to cryptocurrencies with multiple use cases creates uncertainty and discomfort.

Ethereum Is A Versatile Asset That Is Difficult To Evaluate

There is no metric that can determine the potential of Ethereum’s value. While simultaneously acting as a digital store of value, the cryptocurrency can also function as the token required to access the Ethereum network.

Therefore, effectively changing hands must be taken into account when comparing cryptocurrencies invested in exchanges or different asset classes. The existence of regulated derivatives markets allows institutional investors to bet against the price of the asset and is another factor to take into account.

While the benefits of comparing the market value of different asset classes side by side are controversial, the metric essentially works the same for commodities, stocks, and mutual funds.

Ethereum recently exceeded the market capitalization of Nestle, Procter & Gamble, PayPal and Roche, according to data from the Infinite Market Cap.

The American multinational consumer goods company P&G is a company founded in 1837. The company has a diversified portfolio of brands including personal health, consumer care and hygiene. The holding, which has 100,000 employees worldwide, generated $ 13 billion in net income in 2020.

On the other hand, Ethereum has an average of 2,320 developers per month, according to Electric Capital Developer Report. Although it is not a secular company, its decentralized applications (dAppler) handle more than 100,000 daily active addresses. Even more impressively, there are $ 12 billion in daily transfers and transactions on the Ethereum network. These figures alone are extraordinary, even for an S&P 500 company.

Stocks Have Their Own Risks And This Situation Cannot Be Ignored

Comparing an 183-year-old company that is heavily dependent on manufacturing and distribution with a technology-based protocol is unlikely to reveal many similarities. However, stock investors are enjoying the fruits of dividends, and while some claim that Ethereum can be staked for a return, there also appear to be more significant risks.

Investors included in the ETH 2.0 contract have the option to become a full validator or join a pool. However, they may lose money due to malicious activity or inability to verify network transactions. Similar risks arise when borrowing Ethereum through centralized services and decentralized protocols.

On the other hand, listed companies can create new shares to take advantage of overvaluation or increase their cash positions.

Tax changes, operational liabilities and legal changes are other risks that shareholders sometimes face.

Decentralized protocols are virtually free of these dangers. Perhaps this justifies their very high valuation.

Considering the risks described above, investors may conclude that holding Ethereum is less risky than buying stocks. At the very least, it is possible to store your Ethereums in a wallet on your own. Such a reality makes the asset less dependent on third parties and unauthorized transactions.

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