Crypto coins, as we all know, are bought on exchanges like Binance or Bittrex. Cannabis stocks are bought using online exchanges like E-trade. The crypto learning curve is steeper, as traders need to learn about things like coin storage and private keys. The actual trading mechanisms, like using market orders vs. limit orders, is essentially the same. Experienced traders in one area should thus be to quickly adapt and learn the other area.
When based on stock market valuations, the crypto market is approximately 5x larger than the cannabis market. The top 10 cryptos have a combined market cap of $95B, while the top 10 cannabis companies have a combined market cap of $20B.
When based on sales, however, the cannabis industry has the edge. Cannabis is currently valued as a $10B market, with 5-year growth projections ranging from $75B to $150B. The crypto market is too difficult to estimate its size based on sales.
Daily Trading Volumes:
Trading volumes in the crypto market are slightly larger than those in the cannabis market. Here is a breakdown of the top few coins and stocks by market cap:
- Bitcoin (largest cryptocurrency): $5B/day in daily trading volumes.
- Canopy Growth (largest cannabis stock): $10M/day in daily trading volumes.
- EOS (#4 cryptocurrency): $100M/day in daily trading volumes.
- Cronos (#4 cannabis stock): $30M/day in average daily trading volumes.
Die-Hard Core Group of Supporters:
Human nature dictates that people are naturally resistant to change, meaning that any new industry is going to face some uphill resistance as it grows on the path towards achieving mainstream acceptance. In order for that industry to survive , its core group of supporters needs to be absolutely relentless in constantly defending the industry against attacks from critics. Both crypto and cannabis crowds are good examples of this.
Excitability of Crowds:
Going along with the last point, both the crypto and cannabis crowds have a tendency to get excited much quicker than normal, especially when in the presence of one another. This “mania-like” behavior is absolutely vital for any new asset class to rise quickly in value. The cryptocurrency market experienced this in December 2017, and the cannabis is set to experience this in 2019.
Differences – Projects/Teams:
The crypto industry is based around an active startup culture, with new teams and projects constantly forming. The positive of this is that leads to increased innovation, while the negative is that buying and holding a basket of the top few cryptos has proven to be more profitable in the long run than investing in multiple different startup tokens.
Whereas acquisitions rarely happen in the crypto space, they are quite common in the cannabis industry. The ongoing takeover discussions between Aphria and Green Growth Brands are a good example of this. Acquisitions are important because this is where founding teams and early investors can cash in on all their hard work, which creates more of a long-term incentive.
Cannabis is different in that involves less of an active startup culture. Instead, the focus is on (1) using the product; and (2) buying stock in publicly-traded companies. Ease of product use is one area where cannabis has a distinct advantage over crypto, as it’s easier for the average person to use and become familiar with cannabis products than complex crypto platforms.