Bitcoin, commanding over 55.5% of the crypto market with a $2 trillion valuation, serves as the ultimate resistance money, a safe haven against inflation, and the true king of crypto.
After announcing support for a government bitcoin stockpile, then-former President Trump encouraged attendees of the 2024 Bitcoin Conference to “have fun with your bitcoin, your crypto, and everything else that you’re playing with.” Within weeks, Trump announced World Liberty Financial, a platform for decentralized finance. Then, just days before Trump took office, he and his wife each dropped memecoins. And between October and January, as the Trump team sold $300m of World Liberty’s WLFI token, they bought $300m in cryptoassets, much of it in ETH, WBTC, AAVE, and TRX.
Many tend to lump all such cryptoassets together. They admittedly do have something in common—the vast majority have insiders that awarded themselves the lion’s share of the supply to sell to the public. Yet cryptoassets purport to serve a wide variety of purposes. These distinctions matter most when it comes to bitcoin, which stands apart, and above, them all.
To illustrate bitcoin’s unique standing among cryptoassets, let’s look at the entire $3.6 trillion marketplace of cryptoassets as well as where and how bitcoin fits in. The classificatory system below is neither perfect nor exhaustive, but its categories together account for the vast majority of volume traded on both centralized and decentralized exchanges.
After supplying the proper documents at a local Chase bank, you can deposit funds, earn yield, borrow, take leverage, and trade assets. But not everyone has proper documentation. Others do, but prefer not to share. Some services also require your physical presence at the local branch. This is inconvenient when banks close on weekends and holidays. Many worldwide worry little about bank closures simply because they have no banks around in the first place.
Smart contract platforms like Ethereum, Solana, and Avalanche enable people to access financial services outside the banking system. Users can deposit funds, earn yield, borrow, take leverage, and trade assets anywhere without documentation, 24/7/365. These platforms purport to dematerialize and decentralize Wall St. Their native tokens—ETH, SOL, and AVAX—serve a dual role. First, they serve as the currency of transaction fees on their respective networks. Second, users may “stake” or lock up amounts of the native token to contribute to the network’s security in exchange for modest yield. Teams of insiders usually hold large portions of the token supply.
Aggregate market capitalization of top ten layer 1 tokens: $737 billion.
Layer 2 networks claim to draw their security from Layer 1s while offering cheaper and faster transactions. In reality, the tokens bridged to most Layer 2s remain under the control of the Layer 2’s founding team. The native token of a Layer 2 pays transaction fees, and users can usually stake them for a small yield and participate in governance decisions over the protocol. Again, teams of insiders usually hold large portions of the token supply.
Aggregate market capitalization of top ten Layer 2 tokens: $21 billion.
Whereas ethereum and other layer 1s dematerialize Wall St., decentralized finance applications dematerialize the offerings of particular financial institutions such as Chase or Bank of America. The applications themselves feel magical—you can borrow against collateral within seconds at 2 AM on a Saturday without having to leave your couch or sign any forms.
On any functional layer 1 or layer 2, you can find applications not only for borrowing and lending, but also for exchanging assets, bridging funds across networks, providing liquidity, earning yield, and so on. The tokens for these applications exist for three potential reasons: (1) for the team, as vehicles to raise money quickly and efficiently and, for token holders, (2) to collect revenue from the application’s fees and (3) participate in governance over the connected protocol. In all three ways, DeFi tokens behave like shares of dematerialized financial institutions. And, as with the equity of traditional financial institutions, a team of insiders typically holds large portions of the token supply.
Aggregate market capitalization of top ten DeFi tokens: $50 billion.
Stablecoins are tokens pegged to more stable assets such as the U.S. dollar. The biggest stablecoins have central issuers like Circle or Tether. Functional stablecoins retain their peg because issuers permit large institutions to mint and redeem stablecoins for the underlying asset.
US dollar stablecoins are, by nature, similar to electronic dollars in bank accounts. But rather than living inside the private ledgers of banks, stablecoins inhabit the public ledgers of blockchains. They’re similar in another way, too: as with digital dollars, stablecoins can be blocked or frozen by their issuers.
Aggregate market capitalization of top eight stablecoins: $215 billion.
In 2006, Ryan Fugger designed a web of trust payments system called Rippleplay. Half a decade later, a small team took over, ripped the floorboards out, renamed it Ripple, and connected it to the newly designed XRP Ledger while awarding themselves nearly 100% of all XRP tokens. Ripple received 80% of the tokens, and three XRP founders awarded themselves the rest. If the purpose of a system is what it does, then Ripple exists to sell its tokens to the public after creating splashy headlines about institutional partnerships that soon fizzle out.
Market capitalization: $180 Billion.
Memecoins are memes, monetized. Their value fluctuates with memetic momentum.
They serve as vehicles for pure Keynesian beauty contests. The vast majority of memecoins have profit-seeking founders and appear as tokens on Layer 1s like Solana or Layer 2s such as Base (the Coinbase Layer 2 built on Ethereum).
Although most have heard of DOGE, it is also relatively special among memecoins. Like bitcoin, it inhabits its own network and uses proof of work. Its founder also left long ago and sold all his coins. Unlike bitcoin, however, it has an uncapped supply. It is also several orders of magnitude less secure than bitcoin. Like most memecoins, DOGE has little mindshare and ongoing development.
Many have correctly noted that memecoins provide short-term gambling opportunities. In one way, memecoins arguably provide better opportunities than traditional gambling outlets—memecoins have higher win rates than lotteries. In another way, memecoins are worse than traditional gambling—the overwhelming majority are pump and dump schemes perpetrated by profit-seeking founders. Pump.fun, the memecoin launchpad on Solana used recently by the Trumps and Argentine president Milei, has produced over 7 million memecoins. Through this vast sea of coins, the hot ball of money blazes an unpredictable trail. Most guess incorrectly.
Aggregate market capitalization of top ten memecoins: $80 billion.
Tokens for so-called decentralized physical infrastructure networks (DePins) aim to bootstrap decentralized business ventures with a physical footprint. Potential ventures include AI compute, wireless service, and cloud storage. DePin tokens often offset user investment in physical devices or infrastructure, like Helium’s hotspot for mobile coverage. The tokens might also play a role in governance, and so they, too, behave somewhat like shares in a company. As you might guess, insiders often have large chunks of the initial supply.
Aggregate market capitalization of top ten DePin tokens: $20 billion.
Each cryptonetwork is an island of liquidity, and many like to transfer funds from island to island. Bridges allow users to park an asset on one island and receive a synthetic IOU of that asset on another network. These are wrapped tokens. Crucially, not all bridging requires wrapping—thanks to Layerzero Labs, many new tokens arrive on the market under an omni-chain fungible token standard (OFT) capable of hopping from network to network without wrappers. Not all wrapping is necessarily for bridging either. Some wrapped tokens enable users to hold a yield-bearing asset that represents tokens locked by staking.
As with all IOUs, holders often face counterparty risk: if something were to happen to the underlying asset, wrapped asset holders might be out of luck. This happened in late 2022, for example, when a version of wrapped bitcoin connected with FTX dropped 77% overnight.
Aggregate market capitalization of top five wrapped assets: $46 billion.
All the tokens we’ve covered thus far appear on public ledgers with full transaction details. If your address is ever used in connection with a centralized exchange, directly or indirectly, all previous and subsequent financial behavior is inextricably tied to your personal information. Public ledgers enable financial voyeurism.
Some networks use cryptographic tools to obscure or hide transaction details, especially for their native tokens. They offer enhanced privacy, specifically for payments. Some use ring signatures (Monero/XMR) and others use zero-knowledge proofs (Zcash/ZEC). But enhanced privacy has tradeoffs. The first is lower liquidity—because larger exchanges like Binance and Coinbase have avoided XMR due to regulatory challenges, buying and selling remains difficult. The second is auditability—ZEC’s shielding prevents an easy audit of the entire supply. Without easy auditability, we might never know whether and to what extent someone might have exploited an early bug to expand the ZEC supply.
Aggregate market capitalization of top two privacy coins: $5 billion.
Cryptocurrency network protocols, by and large, run on open-source code. This enables anyone to tweak the protocol (or, fork it) and jumpstart a new network. Or, as has twice happened in Ethereum’s history, one may jumpstart a new network, call it the old one, and orphan the original under a different name (Ethereum Classic and EthereumPOW).
Litecoin is a well-known fork of Bitcoin with faster block times. Other well-known forks incorporate the name of the original token, which confuses newcomers. Bitcoin Cash, for example, is a fork of Bitcoin. And Bitcoin SV is a fork of Bitcoin Cash. (Dogecoin is also a fork of a fork—it’s a fork of litecoin, but we won’t include it here to avoid double counting.) These forked protocols not only have their own networks but also their own tokens. Because forked coins usually trade at a steep discount, their networks are generally much less secure.
Aggregate market capitalization of top six coinforks: $25 billion.
All the tokens covered thus far are highly fungible—no single unit of the token differs from others in any important, discernible way. By contrast, each non-fungible token has unique characteristics, often associated with art. Issuers mint NFTs on a blockchain, and users collect and trade them on specialized marketplaces. NFTs not only make scarcity for digital art possible, they also come with a publicly verifiable chain of title.
Aggregate market capitalization of top five NFT collections: $3 billion.
In aggregate, the small list of tokens surveyed so far accounts for approximately $1.2 trillion. With over 17,000 coins listed on websites like Coingecko, the total crypto market capitalization is roughly $3.7 trillion. One coin alone makes up most of the difference. With a market capitalization exceeding $2 trillion, bitcoin enjoys over 55.5% percent of the total crypto market cap.
In addition to being the most valuable asset, bitcoin is the oldest, most secure, and most trustworthy, serving as a safe haven asset amongst those who invest in cryptocurrencies. Tokens rarely surpass their prior bitcoin-denominated all-time high.
Bitcoin has no CEO, no board, and no foundation. Holding the token itself provides no direct power over the protocol, either through governance or block production. Nodes are cheap to run and widely distributed worldwide. Any such node can easily audit the entire supply with a single command: ‘getutxosetinfo’.
As with any technology, Bitcoin had early adopters, to be sure. But there were no Bitcoin insiders. No one printed bitcoin for free to profit from token sales to VCs or retail investors. Satoshi himself paid for bitcoin like any other miner—with energy. When asked about which tokens could be considered securities, former SEC Chair Gary Gensler had no qualms in saying, “Everything but bitcoin.” Despite his attacks on the crypto industry overall, Gensler still recognized bitcoin’s unique properties. On the spectrum of equity-like to commodity-like cryptoassets, bitcoin stands apart.
Bitcoin is special. It’s king. Largely because bitcoin lacks trusted parties to a higher degree than any other cryptocurrency in existence, it is making good on its promise as resistance money—as a safe haven against hyperinflation, as a route around authoritarians, and as fintech for the global south. It’s useful—so it’s not vaporware. So despite its volatility, it’s not just a meme.
2) ETH 408, SOL 115, BNB 100, ADA 35, TRON 22, AVAX 15, SUI 12, TON 12, HBAR 12, NEAR 6. These prices are denominated in billions USD, as listed on Coingecko on 1/31/2025.
3) MNT 4, POL 3.6, ARB 2.9, STX 2, IMX 2, OP 2, STRK .9, MATIC .75, ZK .6, CKB .4
4) LINK 16.5b, HYPE 9.3, Uni 7.5, AAVE 5, ENA 2.5, LIDO 2.2, RAY 2.1, JUP 1.8, PYTH 1, MKR 1.
5) https://www.thetimes.com/world/europe/article/david-balland-ledger-kidnapping-z3kx6svj0
6) USDT 139, USDC 53, USDS 7, USDE 6, DAI 3.5, FDUSD 1.8, sUSDS 1.7, USD0 1.2.
7) https://dune.com/jhackworth/pumpfun
8) https://cointelegraph.com/news/pump-fun-crypto-traders-majority-do-not-realize-profits-dune-data
9) DOGE 50, SHIB 11.5, PEPE 6, TRUMP 5.2, BONK 2, FLOKI 1.3, WIF 1.3, SPX 1.17, FARTCOIN 1, PENGU .93.
10) TAO 3.9, RENDER 3.2, FIL 3, THETA 2, GRT, 1.8, JASMY 1.6, AR 1, BTT 1, AIOZ .9, HNT, .8.
12) WSTETH 13.5, WBTC 13.2, WETH 9.8, WEETH 6.9, CBBTC 2.4.
13) https://electriccoin.co/blog/zcash-counterfeiting-vulnerability-successfully-remediated/
14) XMR 4.4, ZEC .7.
15) LTC 9.8, BCH 8.7, ETC 4.1, BSV 1, DASH .4, MWC .4, ETHW .3.
16) CryptoPunks 1.3, Infinex Patrons .5, Bored Ape Yacht Club .4, Pudgy Penguins .35, and Milady Maker .19.
18) https://www.forbes.com/sites/digital-assets/2023/06/18/the-story-behind-gary-genslers-sec-strategy/
