New Bull Market?

It is quite astonishing: Within only ten years Bitcoin has achieved a veritable Store of Value. Considering that gold has taken centuries to build a reputation as a reliable value store, the sheer growth of crypto currency no. 1 makes you rub your eyes in disbelief.

Quarterly report on base money published

But how does Bitcoin perform against gold, silver and the established fiat currencies? Every three months, Crypto Voices takes a close look at the state of the world economy’s monetary base to answer this question.

It is quite astonishing: Within only ten years Bitcoin has achieved a veritable Store of Value. Considering that gold has taken centuries to build a reputation as a reliable value store, the sheer growth of crypto currency no. 1 makes you rub your eyes in disbelief.

Quarterly report on base money published

But how does Bitcoin perform against gold, silver and the established fiat currencies? Every three months, Crypto Voices takes a close look at the state of the world economy’s monetary base to answer this question.

According to this, Bitcoin is already the twelfth largest currency in the world, at least in theory. How can this be done? First of all, we have to look at which parameters Crypto Voices consults exactly for the evaluation.

The analysts correctly consider the so-called monetary basis, economics speaks of M0. This is central bank money, i.e. mainly physical banknotes. The analysis does not include any additional money. This would also be wrong, since Bitcoin does not have a fractional reserve system. In the BTC ecosystem, there are no banks that can increase the amount of base money in circulation through loans.

According to the report, gold still has the largest market capitalisation of all monetary underlyings at 7.7 trillion US dollars. With a market capitalisation of around 140 billion US dollars, BTC still occupies twelfth place. If one disregards gold and silver, Bitcoin is even part of the Top 10.This can be a new bull market!

One may rightly object that the term market capitalisation is borrowed from the financial sector and does not really fit into the calculation of market values of goods such as Bitcoin.

  • The premise of calculating the value of crypto currency no. 1 on the basis of market capitalisation has a certain significance, but still.
  • Finally, the market capitalisation of gold and silver is also composed of supply and demand.
  • Ultimately, market capitalisation is a simplified vehicle for quantifying the abstract amount of “value” that has already flowed into Bitcoin.

What we can conclude from this

The Base Money Report has a certain informative value about the status quo of crypto and compares the correct parameters with the monetary base of other currencies.

However, one should be cautious in determining an ordinal ranking of funds only on the basis of market capitalization. First and foremost, this measure is a representation of only one of many money functions, namely the value storage function. Today, hardly anyone uses Bitcoin as a means of payment – unlike the US dollar and the euro.

But that would also be premature. Before there can be a global consensus on a means of exchange, this money must first prove its value-retaining properties. This cannot happen within ten years. At this point the chances are not bad that BTC will continue to exist as a store of value.

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