Bitcoin among the world’s major monetary crypto assets

The queen of crypto, Bitcoin, has entered the top 20 of the world’s leading currency assets.

#Bitcoin is the 14th biggest currency in the world 👀 pic.twitter.com/SMcM06uLfb

— Quinten | 048.eth (@QuintenFrancois) December 27, 2023

The ranking has been compiled based on the CEIC data regarding the M1 Supply of the main global currencies.

Summary

• The concept of money supply
• The ranking
• The market capitalization of the Bitcoin crypto-asset
• The comparison with fiat currencies: is the crypto Bitcoin a better asset?

The concept of money supply

There are different forms of currency, and the most classic one is called M1.

Four or five monetary aggregates have been identified, represented by the letter M followed by a number. It ranges from M0 to M3, sometimes even reaching M4.

M0 is the monetary aggregate that only takes into account banknotes and coins, i.e. physical money. Nowadays, it is not considered a particularly interesting indicator.

The main monetary aggregate, in a strict sense, is precisely M1, which includes not only physical money but also checks and various bank deposits.

This aggregate represents the existing liquid circulating money, excluding those forms of money that are not actually in circulation (such as that held by central banks), and those that are not truly liquid (because they are, for example, tied up).

The ranking

At the top of the world ranking of global currencies for M1, with values expressed in US dollars, there is indeed the US Dollar, with over 18 trillion dollars.

This is a very high value, but not so much as to create a gap compared to other currencies. In fact, in second place there is the euro with over 11,000 billion, followed by the Chinese yuan with over 9,000 billion.

Note that in fourth place there is the Japanese yen with over 7,000 billion.

Bitcoin is much further behind, below 800 billion, but still ahead of currencies like the Indian rupee or the Russian ruble.

Excluding the top four positions, which are in a league of their own, even the British pound with its 2.8 trillion dollars is not that far off from Bitcoin. Furthermore, the Swiss franc is practically on par with BTC, just below the South Korean won.

The market capitalization of the Bitcoin crypto-asset

A slightly different discourse concerns market capitalization.

Capitalization market simply refers to the product of the dollar price of individual coins multiplied by the quantity of these coins present in the financial markets.

The ranking in this sense was drawn up by the FiatMarketCap website with values expressed in BTC.

In this case, Bitcoin is in sixteenth place, just above the Thai baht and the Saudi riyal.

In this ranking, Bitcoin is far behind the Indian rupee, and also behind the Russian ruble and the Mexican peso.

However, it is worth noting that this other ranking is not dominated by the US dollar, but by the Chinese yuan, with a market capitalization of over 963 million BTC (over 41 trillion dollars). The dollar is only in second place with over 881 million BTC, and the euro is a distant third with 381 million BTC.

The two rankings are somewhat similar, but they are different. However, in both cases Bitcoin is among the top 20 currencies in the world.

Note that Bitcoin’s position is better in the first ranking, the M1, while it is lower in the second. The fact is that the second also takes into account money that is not actually existing or circulating, that is, everything present on the markets even if it is still or tied up.

Moreover, on FiatMarketCap for example, the market capitalization of the US dollar is even 37,000 billion, while on CEIC it is 18,000 billion.

The comparison with fiat currencies: is the crypto Bitcoin a better asset?

To be honest, however, comparing Bitcoin to fiat currencies is inappropriate.

In fact, Bitcoin is not really a transactional currency like all fiat currencies are, because it is not used for purchasing or trading.

Fiat currencies, on the other hand, are indeed stores of value, but inflationary, therefore usable as such only in the medium-short term. Bitcoin, on the other hand, has been designed to have a deflationary nature and to be a store of value in the long term.

This leads to the need to force the consideration of liquids and circulating the majority of existing BTC in the world because instead, most of it is stagnant in non-custodial wallets for years, unused.

Therefore, this is a curious comparison that can provide some indication regarding the orders of magnitude, but should not be taken as a precise and meaningful comparison, as these are slightly different assets.

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