Did you know that Bitcoin alone is one of the most valuable assets on the planet—with a market capitalization higher than Walmart and Exxon Mobil? As a whole, the global crypto market cap is also now larger than some of the world’s biggest companies, including Berkshire Hathaway, Tesla and Meta (Facebook). With a current value at over $1 Trillion and a global user base of 300 Million, it’s safe to say that cryptocurrencies are more popular than ever before.
Thousands of nonprofits looking to diversify their revenue streams have discovered the many advantages to crypto fundraising.
Read on to learn why market cap matters, and how this vital statistic can inform your nonprofit’s decision to accept cryptocurrency donations.
What is the Current Crypto Market Cap?
As of August 2022, the total cryptocurrency market capitalization is $1.1 Trillion. Several websites like CoinGecko track and display the global crypto market cap, so it’s always easy to find the current value.
Why is Market Cap Important in Crypto?
Just like with any other asset, market capitalization is a key statistic for measuring a cryptocurrency’s value. Investors look at an asset’s market cap over time to make financial decisions and consider factors such as:
- Is there growth potential in the short and/or long term?
- Is the asset currently safe to buy?
- Is the entire asset class/sector performing well?
How is the Crypto Market Cap Calculated?
According to Coinbase, cryptocurrency market cap is “the total value of all the coins that have been mined. It’s calculated by multiplying the number of coins in circulation by the current market price of a single coin.”
Who is Buying Cryptocurrency?
Institutional investors are increasingly turning to Bitcoin and other cryptocurrencies. Some notable institutional purchases of Bitcoin include:
- Square purchasing $50 million of Bitcoin
- MassMutual purchasing $100 million of Bitcoin
- MicroStrategy purchasing 129,699 BTC
On the retail side, younger investors continue to dominate the ranks, particularly millennials and Gen Z. Purchasing Bitcoin has become easier than ever with PayPal, CashApp, and Robinhood all now offering support for cryptocurrency trading.
Why Do These Investors Donate Crypto?
The people who are buying cryptocurrency may also be sitting on large investment gains, which means incurring capital gains taxes when they sell their assets. Those same investors are going to look at ways to reduce their taxes. One of the most popular ways for crypto holders to reduce their taxes is to donate a portion of their crypto to their favorite cause.
Since the IRS classifies crypto as a property, that means from a tax perspective, donating crypto is very similar to stock donations. Some crypto donors can lower their capital gains by about 30%, allowing them to donate 30% more to the nonprofit of their choice.
Why else do crypto donors give? Read our article on common motivations for crypto donors.
How Can Nonprofits Benefit from a Growing Crypto Market?
Every market experiences periods of growth and periods of correction. When market growth is steady, many crypto investors see large portfolio gains. As a result, crypto donation volume can soar to incredible new heights.
But even in “bear market” conditions when there is a low crypto market cap, nonprofits can find ways to take advantage of the opportunities presented. Though it seems paradoxical, crypto’s volatility can actually benefit nonprofits tremendously.
Over the past decade, the crypto market has grown dramatically—making it an attractive investment to hundreds of millions of people around the world. Thousands of nonprofits have realized the fundraising potential in crypto.
Today, leading charities like Save the Children, American Cancer Society and No Kid Hungry are actively accepting crypto donations with The Giving Block’s all-in-one crypto fundraising solution.
Discover the Benefits of Accepting Crypto Donations
Is your nonprofit ready to tap into this growing revenue stream? Get free access to our on-demand Crypto 101 Webinar for Nonprofits to learn how crypto has become an essential part of today’s charitable giving landscape.