The Rise of Bitcoin in Global Currency Rankings
Bitcoin, the leading cryptocurrency, has made its way into the top 20 global currency assets. This ranking is based on the M1 Supply data from CEIC, which measures the amount of liquid circulating money in different currencies.
The Concept of Money Supply
M1 is the main monetary aggregate that includes physical money, checks, and bank deposits. It represents the existing liquid circulating money, excluding non-circulating money held by central banks and illiquid forms of money.
The Ranking
The US Dollar tops the global currency ranking with over 18 trillion dollars in M1 value. The Euro and Chinese Yuan follow closely behind. Bitcoin is ranked below 800 billion dollars but still ahead of currencies like the Indian Rupee and Russian Ruble.
Market Capitalization of Bitcoin
Market capitalization refers to the product of the dollar price of individual coins multiplied by their quantity in financial markets. According to FiatMarketCap, Bitcoin ranks sixteenth in market capitalization, just above the Thai Baht and Saudi Riyal. However, this ranking is dominated by the Chinese Yuan, with a market capitalization of over 963 million BTC.
A Comparison with Fiat Currencies
It’s important to note that comparing Bitcoin to fiat currencies is not entirely appropriate. Bitcoin is not primarily used for transactions like fiat currencies but rather designed as a long-term store of value with a deflationary nature. Most Bitcoins are held in non-custodial wallets for years, unused. Therefore, while these rankings provide an indication of magnitude, they should not be seen as precise comparisons due to the differences in nature between Bitcoin and fiat currencies.
Hot Take: Bitcoin’s Growing Influence
Bitcoin’s rise in global currency rankings highlights its growing influence in the financial world. While it may not be on par with traditional fiat currencies in terms of circulation and market capitalization, its unique characteristics make it an attractive asset for long-term value storage. As more people recognize Bitcoin’s potential, its position in global rankings is likely to continue evolving.
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