Why crypto valuations aren’t as absurd as they seem.

At first glance, crypto valuations can look excessive. A digital network worth hundreds of billions — how is that possible? The answer lies not in what crypto is today, but in the markets it aims to capture.

Crypto targets the world’s largest markets.

Bitcoin is now worth more than 2 trillion dollars. That sounds like a lot, and it is. But Bitcoin isn’t competing with tech companies or apps. It’s positioning itself as an alternative to gold, which together with jewelry and reserves represents over 25 trillion dollars worldwide. Seen that way, the valuation suddenly makes sense. If Bitcoin captures even ten percent of that market, its current value is justified.

The same goes for blockchains like Ethereum and Solana. They target even larger markets: payments, bonds, equities, real estate, and tokenized assets. According to McKinsey, the global payments industry processes 1.8 quadrillion dollars in transactions each year. The total value of financial assets worldwide — stocks, bonds, and real estate — exceeds 600 trillion dollars. No single company could ever dominate such markets. But a blockchain isn’t a company. It’s an open, global network that anyone can build on. That’s why capturing even a small share can be incredibly valuable.

Tether shows how big digital money can get.

A good example is Tether (USDT), the world’s largest stablecoin issuer. Recent reports suggested a valuation of 500 billion dollars — comparable to SpaceX or OpenAI. At first glance, that seems absurd. Tether doesn’t launch rockets or build artificial intelligence. It runs digital dollars. But the market it’s serving is massive. In many emerging economies, Tether has already become the dominant form of digital money. If even a few percent of the global money supply moves to stablecoins like USDT, Tether could become one of the most profitable companies in history. With 3 trillion dollars under management, it would earn more than Saudi Aramco in its record year.

A new way to think about value.

Looking at crypto through the lens of traditional companies misses the scale of what’s unfolding. Crypto isn’t about niche markets, but about the very foundations of the global economy. That’s why valuations may look extreme, yet only reflect a fraction of the opportunity ahead.