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Read the following article: How Much of All Money Is in Bitcoin? By NATHAN REIFF Updated November 26, 2021 Reviewed by SOMER ANDERSON Fact checked
Read the following article: How Much of All Money Is in Bitcoin?
By
NATHAN REIFF
Updated November 26, 2021
Reviewed by
SOMER ANDERSON
Fact checked by
PETE RATHBURN
After its launch in 2009, Bitcoin ushered in a new era of blockchain technology and digital currencies. Given all the talk about Bitcoin, you'd think it would be everywhere. Is that really true? How much is Bitcoin worth? Perhaps more importantly, how much of the world's money is in bitcoins? With the price of BTC at $54,752 as of Nov. 26, 2021, it is certainly worth our time to figure it out.
How Much Is Bitcoin Worth?
We will calculate the total value of Bitcoin first because that is the easy part. According to CoinMarketCap, the value of all the bitcoins in the world was over $1.03 trillion as of Nov. 26, 2021.1 For comparison, Forbes estimated the net worth of Amazon (AMZN) founder Jeff Bezos at $205.7 billion.2 That makes the market cap of Bitcoin over five times larger than Bezos' fortune.
Bitcoin and the Money Supply
To get a sense of how much of the world's money is in bitcoins, we must determine the total amount of money. As it turns out, this is not the easiest question to answer. Such a calculation might take into account dozens of categories of wealth, including banknotes, precious metals, money market accounts, and debt. The Money Project attempted this computation in May of 2020 and estimated around $35.2 trillion in global narrow money.4
That leaves Bitcoin at about 2.9% of the estimated value of narrow money from The Money Project's report.
Bitcoin vs. Gold
How does Bitcoin compare to gold? After all, some people still consider gold to be the safest of safe haven assets. It is certainly the gold standard to which other currencies must be compared. We begin with the World Gold Council's figures. They estimated that about 197,576 tonnes of gold had been mined throughout history as of the end of 2019.5 An average of around 2,500 tonnes are mined per year, so we can safely estimate around 202,291 tonnes of gold in existence as of Nov. 26, 2021. There are 32,150.7 troy ounces of gold in one tonne, and the price of gold per ounce is about $1,823 as of Nov. 26, 2021.6 So, we can estimate the total value of all gold as:
202,291 tonnes of gold x 32,150.7 troy ounces per tonne x $1,823 per ounce = $11.8 trillion.
In total, the value of all Bitcoin was about 9% of the value of all gold.
Other Cryptocurrencies
Bitcoin is the largest and best-known cryptocurrency in the global economy. However, it is far from the only one. If we combine Bitcoin with Litecoin, Monero, Ethereum, and all other significant cryptocurrencies, the total value comes to roughly $2.48 trillion.7 That is about 7% of the value of all narrow money given above.
https://www.investopedia.com/tech/how-much-worlds-money-bitcoin/?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral
Question: can you use economics to analyze how Cypto Currency is changing the economics of the dollar? What threats and opportunities does Crypto Currency present to the global economy?
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