google-news-img
spot_imgspot_imgspot_img

Crypto News: Industry Mirrors Uneven Wealth Distribution In Stock Market

    • Only 10% of firms on Wall Street account for 75% of the broader market.

    • In a related shift, Bitcoin and Ethereum also command over 70% of the crypto market.

    • The crash of the top firms can impact overall market performance.

With new companies making headlines in key crypto news, there are concerns around wealth distribution.

The broader financial market community has been alerted to the unprecedented concentration of wealth in the stock market. Only a handful of large companies own a high concentration of U.S stocks.

This trend also plays out with cryptocurrency assets such as Bitcoin (BTC) and Ethereum (ETH) dominating.

Uneven Wealth Distribution in Traditional Market

The Kobeissi Letter, a leading voice in the global capital market, drew the attention of the ecosystem in an update on X.

According to the post, the top 10% of the most extensive U.S. stocks currently account for 75% or three-quarters of the total U.S. equity market.

This highlights a worrying trend as the market influence and wealth have become more concentrated.

- Advertisement -

In historical comparison, the current levels have surpassed those before the Great Depression of 1930 and the Dot-Com Bubble of 2000.

For instance, the top 10 stocks in the S&P 500 now account for approximately 40% of the entire index.

This fact implies that a few companies primarily dominated by tech giants drive the market’s performance.

Source: X

Apple, Microsoft, NVIDIA, and all tech giants occupy the top three positions.

Other notable names include Amazon, Alphabet (Google), Saudi Aramco, Meta Platforms, Tesla, TSMC, and Broadcom, completing the top ten.

The Kobeissi Letter highlights the volatility risk of this development. This implies that if any of these few dominant stocks should falter, the entire capital market could become impacted.

This trend exposes investors to relying on the successes of just a few companies in the market.

With the concentration hitting all-time high figures, the post is sounding an alarm bell on likely economic bubbles ahead due to the uneven wealth distribution.

Crypto News: Market Cap Ranking

In terms of market capitalization comparison, Apple leads the pack with $3.480 trillion in a market with a total market cap of $115.113 trillion.

Microsoft also registers in the three trillion zone with a market cap of $3.059 trillion. NVIDIA, however, fails to cut with its market cap at $2.924 trillion.

The top ten stocks in the capital market are all in the trillion-dollar elite group.

This marks the significant difference between the capital and digital markets, which has come to mirror the uneven distribution of wealth.

Bitcoin, Ethereum Replicates Crypto’s Market Dominance Problem

Interestingly, the cryptocurrency world is not any different from the capital market.

Despite its relatively short existence, Bitcoin has a market capitalization of $1.97 trillion with a total market cap of $3.27 trillion. This is over 60% of the total market share.

Ethereum, the closest asset to Bitcoin, is in the distant second place at $341.43 billion. This shows that Bitcoin is about thrice the value of Ethereum in terms of market cap.

However, combined assets take 70% of the total digital asset market share. The implication is that the global digital asset market value rests majorly on Bitcoin and Ethereum.

If any of these digital assets were to crash, the crypto news headline might be filled with related crashes across the market.

Crypto analysts emphasize that this scenario already plays out on a small scale. Many other coins suffer the same fate whenever BTC or ETH prices decline.

This development exposes the danger of only a handful of projects accounting for the market distribution.

Disclaimer

The contents of this page are intended for general informational purposes and do not constitute financial, investment, or any other form of advice. Investing in or trading crypto assets carries the risk of financial loss. The forecasted data (also called “price prediction”) on this page are subject to change without notice and are not guaranteed to be accurate.

Our Newsletter

Subscribe to our newsletter to get the latest news and promotions.

Godfrey Benjamin
Godfrey Benjaminhttps://www.thecoinrepublic.com/
Godfrey Benjamin is an experienced crypto journalist whose main goal is to educate everyone around him about the prospects of Web 3.0. His love for crypto was birthed when, as a former banker, he discovered the obvious advantages of decentralized money over traditional payments. With his vast experience covering various aspects of Web3, Godfrey's articles has been featured on Blockchain.news, Cryptonews and Coingape, among others.