Crypto -vs- Actual Miners

We have been following the progress of mining sector securities for quite some time now (Because You Know I’m All About That Base, ‘Bout That Base, Base Metals).

The arguments supporting this trade are:
a) reduced capex and lack of investment in new mines
b) long lead times to new supply (it takes around nine years to build a new copper mine)
c) simultaneous global growth and a resulting increase in demand
d) management commitment to returning cash to shareholders

Given the hysteria around crypto currencies and the resulting incentive to ‘mine’ them, we decided to compare the market capitalizations of the largest publically traded mining companies in the world to the largest crypto currencies. The results were quite interesting: the top five crypto currencies were worth around the same amount as the seven largest publically traded miners on earth.

This is a betrayal of fundamental economics in that crypto currencies are a function of false scarcity (you can generate as many crypto currencies as you like using the available code) versus actual scarcity (code cannot produce copper).