Bitcoin has become the fifth largest currency in the world. To whom is he inferior?

Since its inception, Bitcoin has shown unprecedented returns to its investors. The cryptocurrency has risen in price from almost a couple of cents to more than 41 thousand dollars – an all-time high set recently.

During this time, Bitcoin’s market capitalization rose sharply and reached almost $ 780 billion, which made Bitcoin not only the largest cryptocurrency ever to exist, but also placed it in the fifth place in the ranking of the largest traditional currencies in the world for this indicator.

Recall that the capitalization of a cryptocurrency is defined as the product of the number of coins in circulation by the value of each of them. For example, if there are a thousand tokens in circulation at a price of $ 50 each, the capitalization in this case will be $ 50 thousand. This approach is relevant for all cryptocurrencies.

We checked the actual data: today Bitcoin is trading at $ 39,562, while there are 18,595,231 coins in circulation. Their number increases approximately every 10 minutes in the form of a reward for the created block, which miners receive.

New Bitcoin records

Although Bitcoin and fiat – that is, traditional – currencies are not entirely equivalent in terms of calculating their capitalization, we can roughly estimate where BTC is in the world currency ranking. To do this, you need to compare its market capitalization with the money supply of fiat currencies M0. Recall that the monetary aggregate M0 is the total value of all banknotes, coins and other substitutes for money that can be easily converted into cash. M0 is also commonly known as tight money.

Since these figures are known – after all, representatives of central banks know how much money they have printed – such figures can be compared. In the case of cryptocurrencies, it is also easy to find out the capitalization, since the actual amount of bitcoins or other coins can be checked in their open blockchains.

The United States dollar (USD) is currently the largest fiat currency in circulation. According to the US Federal Reserve, there are $ 1.95 trillion in Federal Reserve notes and coins in circulation, of which more than three-quarters are $ 100 and $ 20 notes.

Next up is the Euro (EUR), a relatively new currency that was launched in 2002 and is now used in much of Europe and most EU member states. Like the US Federal Reserve, the European Central Bank (ECB) is constantly updating information on the number of euro banknotes and coins it issues. According to official statistics, at the time of the last update in November 2020, there was just over 1.4 trillion euros in circulation, according to Decrypt. Since the first introduction of the euro, this amount has more than tripled.

The third and fourth places are occupied by the Chinese yuan and the Japanese yen. Their figures are equivalent to $ 1.26 and $ 1.1 trillion, respectively.

Let’s move on to Bitcoin, which would be in fifth place in this ranking. To date, more than 18.595 million BTC have already been mined, each coin is now valued at about $ 39,562. Thus, the M0 money supply for Bitcoin is $ 734 billion, which is at least half the Japanese yen. At the current market capitalization, Bitcoin will need to grow by at least 200 percent to become the largest currency in the world.

Note that of the above numbers, not all of the 18.59 million mined bitcoins are in circulation. A noticeable share of these coins has been lost forever, others have been lying on investors’ wallets for a very long time without movement. Therefore, the real indicator for the main cryptocurrency is slightly lower than the above calculations.

However, in this case, it will not be possible to find out the exact figure, since it is unlikely that all cryptocurrency owners will tell about the volume of the lost cryptocurrency. In addition, in the early stages of Bitcoin’s existence – when it was worth a few pennies – it was treated in a completely different way. In this regard, someone could lose a hundred or two BTC without any regrets and not even notice it. And now the loss of even 2.6 bitcoins is very painful for the pocket.

At current rates, Bitcoin is also the eighth largest company in the world by market capitalization. Now it is, among other things, inferior to Tesla and Facebook, although against the background of recent growth, the cryptocurrency has already managed to get ahead of them.

We believe this event is further proof of the success of the cryptocurrency niche and the current growth of Bitcoin. Now the cryptocurrency sets new price records almost every day, due to which it attracts more and more attention of ordinary people. And if BTC continues to move up the above ratings, the activity of investors will only be higher.

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