Bitcoin’s Use Cases: Medium of Exchange, Store of Value, and Unit of Accounting
Bitcoin (BTC) serves as a medium of exchange (MoE), a store of value (SoV), and a unit of accounting (UoA). These three use cases are essential for money. As a UoA, Bitcoin can be used to price various things, including the cost of an iPhone 15 or the market capitalization of fiat currencies worldwide.
Cryptocurrency Service Providers Pricing Assets in Bitcoin
Cryptocurrency service providers are already using Bitcoin as their unit of accounting to price other assets. For example, CoinMarketCap compares Bitcoin’s market value by pricing the market capitalization of major fiat currencies in BTC. To do this, the platform multiplies the current price of a fiat currency by its circulating supply reported by its central bank.
Top 20 Fiat Currencies with Market Caps Higher Than Bitcoin’s Circulating Supply
The top 20 fiat currencies have market caps that exceed Bitcoin’s current circulating supply of 19.51 million BTC. The Vietnamese Dong (VND) comes closest to Bitcoin with a market cap of 20,875,201 BTC. The top 20 fiat currencies are:
- Chinese Yuan (CNY)
- United States Dollar (USD)
- Euro (EUR)
- Japanese Yen (JPY)
- Pound Sterling (GBP)
- South Korean Won (KRW)
- Indian Rupee (INR)
- Canadian Dollar (CAD)
- Hong Kong Dollar (HKD)
- Brazilian Real (BRL)
- New Taiwan Dollar (TWD)
- Australian Dollar (AUD)
- Swiss Franc (CHF)
- Russian Ruble (RUB)
- Mexican Peso (MXN)
- Saudi Riyal (SAR)
- Thai Baht (THB)
- United Arab Emirates Dirham (AED)
- Singapore Dollar (SGD)
- Vietnamese Dong (VND)
CNY and USD Market Cap Compared to Bitcoin
The Chinese Yuan (CNY) is the leading fiat currency in terms of market cap. With a price of 497 sats and a circulating supply of 286.93 trillion CNY, the CNY has a market cap that exceeds 1.42 billion BTC, making it 72 times larger than Bitcoin.
The United States Dollar (USD) closely follows the CNY with a market cap of 1.26 billion BTC, which is 64 times higher than Bitcoin’s available supply and capitalization.
EUR, JPY, and GBP Market Caps in Bitcoin
The EUR has a market cap close to 560 million BTC, the JPY slightly exceeds 380 million BTC, and the GBP holds the fifth position with a market capitalization of 155 million BTC.
Hot Take: Fiat Currencies Maintain Higher Market Caps Than Bitcoin’s Circulating Supply
Fiat currencies, including the Chinese Yuan and the United States Dollar, have significantly higher market caps compared to Bitcoin’s circulating supply. Despite its popularity and growth, Bitcoin still has a long way to go before surpassing these major fiat currencies in terms of market capitalization. However, as cryptocurrency continues to gain traction and adoption increases, the landscape may change in the future.
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