The Road to $1 Trillion in Market Cap 

Crypto FOMO Drives Capital Flows Out Of Big Tech (For Now)

Retail investors have taken money out of the equity market and rotated into crypto to catch the wave.  With all crypto's now worth more than $2 Trillion in market cap and Bitcoin standing out at $1 trillion, this poses a risk to the US dollar dominance as the reserve currency.

  • Bitcoin ($57,000), $1T market cap
  • Ethereum ($3,491), $404 B market cap
  • Binance Coin ($643.74), $98 B market cap
  • Dogecoin ($.597), $77 B market cap
  • XRP ($1.67), $75 B market cap
  • Tether (.9999) $53 B market cap
  • Cardano ($1.63) $52 B market cap

The current rush into crypto and NFT's creates a casino atmosphere and "gold" rush into the next big thing.  Only a few crypto assets will survive in the long run.  Bitcoin's finite limit of 21 million coins, Ethereum's role in commerce, and Cardano seem to have the best prospects.  Expect this trend to continue into the summer and taper off as the reopen rotation gains traction.

The Bottom Line: Don't Count Big Tech Out

The first quarter of 2021 showed how the digital giants continued to grow at break neck paces.  While stock prices reflect a reopen rotation and crypto FOMO trend, few asset classes can show this type of year over year performance.  Don't count big tech out.  Big tech should remain a key component in portfolios.  However, not all big tech stocks are created equal.  Only the digital giants will continue to create competitive moats, invest in innovation, and play the long term game of global domination.

For the year:

  • Google up 30%
  • AirBnB up 22.68%
  • Oracle up 17.42%
  • IBM up 13.93%
  • SAP up 11.16%

Buying big tech stocks on the dip have often boded well for the long term investor.  Tesla, Apple, and Amazon are currently under performing for the year but have long term upside and most likely may be undervalued in the past week.  Take note, Honeywell's entry into the NASDAQ reflects how the company's portfolio is geared for more growth with Quantum Computing and Connected Buildings.

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Your POV

Are you in the repoen rotation or the crypto FOMO?  What are you investing in next?  Ready to find the next set of digital giants?

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