The market capitalization ceiling of the encryption giants has emerged, and the next round of funds may flow into mining stocks.

In the Crypto Assets industry, only two companies have ever surpassed a market capitalization of 100 billion, which may indicate that the market capitalization ceiling for the industry has already emerged. Comparing this to a well-known pharmaceutical company's market capitalization of 140 billion and quarterly profits of 4 billion, this could represent the highest valuation level that these encryption companies can achieve, even in extreme circumstances.

Once regarded as one of the most profitable exchanges in the world, a certain Crypto Assets trading platform had a market capitalization that once exceeded 10 billion dollars. At the time of its listing on the platform, quarterly profits reached as high as 3 billion dollars, showcasing astonishing profitability.

Another company has adopted a strategy of continuously financing the purchase of Bitcoin through bond issuance. Currently, the company holds 331,200 coins, accounting for approximately 1.5% of the total Bitcoin supply, with a holding value reaching $33 billion. Industry experts analyze that the core model of the company is to view long-term debt as profits on the balance sheet rather than generating cash flow, which well explains why the company's stock price has seen such a significant increase.

Let's compare the profit models of this company and a certain mining company. Assume both companies raise $1.2 billion, with the former used to purchase Bitcoin and the latter to invest in mining machines for mining.

When the price of Bitcoin rises from $50,000 to $100,000, the former netted $1.2 billion through investing in Bitcoin, but this is unrelated to the company's business cash flow and is considered unrealized gains. Considering the Bitcoin accumulated by the company previously, it could have actually earned over $15 billion in a year.

In contrast, a mining company's $1.2 billion investment in mining, although the mining costs are high, has a payback period of about one year for the mining machines over time, after which it could generate a cash flow of $100 million per month.

Therefore, for the same 1.2 billion USD investment, the profit of the former depends on the price of Bitcoin, while the profit of the latter depends on the duration of Bitcoin. This is also the core reason why funds may flow from the former to mining stocks when Bitcoin reaches 100,000 USD. As long as the price of Bitcoin remains at 100,000 USD and the hash rate scale remains unchanged, the longer the time, the higher the accumulated profit.

As the price of Bitcoin rises, the marginal effect of financing to purchase Bitcoin will diminish. If the price of Bitcoin has already reached $100,000, the company refinancing $1.2 billion will face a significant increase in difficulty to double its investment, and if the rise in Bitcoin is only 20%, then the profit will decrease significantly to $240 million.

The potential for Bitcoin prices to rise is limited, which restricts the company's growth potential in purchasing Bitcoin through financing. As Bitcoin prices increase, the company's financing capabilities will also be constrained. Therefore, what seems like an infinite cycle of rising prices actually has a ceiling, and financing will also be difficult to sustain.