Total market valuations vs crypto and precious metals

Total market valuation of cryptocurrency and silver are low compared to other classes while the derivatives are at all time high.

What is a derivate?

A derivative is a financial security with a value that is reliant upon or derived from, an underlying asset or group of assets—a benchmark. The derivative itself is a contract between two or more parties, and the derivative derives its price from fluctuations in the underlying asset.

The most common underlying assets for derivatives are stocks, bonds, commodities, currencies, interest rates, and market indexes. These assets are commonly purchased through brokerages.

From Investopedia.com

…derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.

-Warren Buffet in the Shareholder letter 2002

Derivatives caused the stock market crash 2008. Since then it has grown another 60% to 1.0 Quadrillion. Recently it was a reason why the oil price went negative.

For comparison:

CategoryValue ($ Billions, USD)Source
Ethereum$27CoinMarketCap
Silver$44World Silver Survey 2019
Bitcoin$179CoinMarketCap
Cryptocurrencies$244CoinMarketCap
Coins & Bank Notes$6,662BIS
Gold$10,891World Gold Council (2020)
The Fortune 500$22,600Fortune 500 (2019 list)
Stock Markets$89,475WFE (April 2020)
Global Debt$252,600IIF Debt Monitor
Global Real Estate$280,600Savills Global Research (2018 est.)
Global Wealth$360,603Credit Suisse
Derivatives (Notional Value – High end)$1,000,000Various sources (Unofficial)
For full list and a great visualization follow the link above.

Interesting ratios suggesting decreasing stock market valuation or/and increased gold prices over years. It took more than 10 years during the 60s.

Commodities Relative to the Dow Jones

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