- Prior to COVID-19, there were 6 banks with a market capitalization larger than Bitcoin
- Post pandemic only 2 banks have been able to retain the status
- BTC’s market cap witnesses almost 50% of growth
Covid-19 has been grounding the economy and the health systems of various countries. Most countries’ economies have taken a beating and now according to a report, about 14 of the world’s top banks have lost $635.33 billion in market capitalization. Putting this into perspective, the number is approximately three times the total market cap of Bitcoin.
Prior to the Covid-19 pandemic, the top 6 banks whose market capitalization was bigger than the Bitcoin were JPMorgan Chase ($437.2 bn market cap), Bank of America ($316.8 bn), Industrial and Commerical Bank of China ( $267.3 bn), Wells Fargo, US ( $227.5 bn), China Construction Bank ($216.26 bn) and Agricultural Bank of China ( $152.24 bn).
But post that, both JPMorgan’s, as well as Bank of America, have and have suffered losses of $131.86 billion and $93.79 billion respectively. Industrial & Commercial Bank of China was partially successful in coming closer to a market cap of BTC but a loss of $73.91 billion hindered the way.
While the banks suffered losses, the market cap of Bitcoin was increasing dramatically. In fact, in 2019, it has increased from $130 billion to $198 billion gaining $68 billion.
How will it Affect Consumers?
The market cap losses may be huge for the banking sector but the data from the KBRA’s research shows that the US banking sector has performed comparatively better in the times of pandemic. The raise in the provisions for potential losses, fee waivers for users and much other financial support for their customers is good news amidst the chaos. The report also suggests that microeconomics can also highly affect the sector. But stress tests conducted by research agencies like KBRA and Fitch Ratings show that there may be losses in earnings but the banks will be resilient as no bank failed in the test.