Bitcoin market capitalization is overtaking the money bases of many countries. The Canadian dollar is arguably next.
When Bitcoin ( BTC ) broke the $ 14,000 mark, its market capitalization surged above the monetary base of the Russian ruble .
This includes both physical currency and bank reserves, which are usually held by a country’s central banks
The above chart may seem complicated at first, but it only compares gold, silver, bitcoin and the rest of the global money bases. We can see that the US is 4.9 trillion. Holding US dollars in physical notes, coins and bank deposits at the US Federal Reserve. If we divide that number by the current 18.5 million BTC, we get to the above $ 263,000.
For Bitcoin’s market capitalization to match the US monetary base, the price would have to be above $ 263,000. At first glance, that seems far-fetched. But BTC has already overshadowed several currencies, such as the Brazilian real, the Swedish krona and the South Korean won.
For a cryptocurrency that’s only 11 years old, that’s no mean feat. According to Fernando Ulrich, the economist behind Crypto Voices, the 30 largest countries cover 95 percent of GDP with their base funds. In addition to the euro being the currency of many countries, some of the 113 leading countries have pegged their currencies to the US dollar.
The researchers at Crypto Voices therefore came to the conclusion:
“So far, the money monopoly ‘works’ for the central banks and their governments. It is practically free: Fiat has proven to be almost ‘independent’ of the gold market value.”
The researchers explained:
“As for #Bitcoin, if it gets big enough to appear on this chart and / or be held by central banks, then and only then will we get an idea of what Bitcoin ‘costs’ central banks”.
Some people might interpret the analysis as pessimistic, but basically it’s just the opposite.
The researchers at Crypto Voices conclude that central banks and governments have previously been able to print money regardless of their gold holdings. So you don’t have to look for a new “gold standard” or something similar anytime soon.
According to the researchers, inflation is gradually depreciating fiat currencies. This caused Bitcoin to overtake a number of currencies as they were overprinted. In fact, 2020 saw the largest global monetary expansion ever.