The estimated total amount of money (including physical cash, checking and savings deposits, and other types of deposits) in circulation in the world is around $90 to $95 trillion.
It's important to note that this number includes both physical currency and digital assets that represent money, such as bank deposits and other forms of electronic money. However, it does not include other assets such as stocks, bonds, real estate, or other forms of wealth that are not considered money.
How high can BTC fly?
It's difficult to predict what the exact price of Bitcoin (BTC) would be if it achieved worldwide adoption, as there are many factors that could influence its value, such as supply and demand, competition from other cryptocurrencies, government regulations, and global economic conditions.
However, one way to estimate a potential price for Bitcoin is to use the market capitalization of gold as a benchmark. Gold has a market capitalization of around $10 trillion, which represents the total value of all the gold ever mined. If Bitcoin were to capture just a fraction of that market, say 10%, it would have a market capitalization of $1 trillion.
Assuming there are around 21 million Bitcoins in circulation, a $1 trillion market capitalization would put the price of Bitcoin at around $47,619 per coin. However, this is a purely hypothetical scenario and should not be taken as a guarantee of future performance. The actual price of Bitcoin would depend on many complex and unpredictable factors, and there are no guarantees of success when investing in any cryptocurrency.
We have all seen BTC go way higher than $47,619 per coin. So, this is definitely not the limit. So what could it be?
It depends on what role the BTC will have in the future. I can see two possible scenarios:
- BTC as digital gold
- BTC as legal tender
1. BTC as digital gold.
Bitcoin is often referred to as "digital gold" because, like gold, it has a number of characteristics that make it a valuable asset. It is durable, divisible, and easily transferable, making it a useful medium of exchange. It is also scarce, and its value is based on the perception of its utility and its perceived scarcity.
Overall, while Bitcoin shares some similarities with gold as a store of value and a hedge against inflation, it is a distinct asset with its own unique characteristics and risks, and investors should carefully consider these factors when deciding whether to invest in Bitcoin or any other asset.
Because of the similarities, I can't imagine BTC total market cap reaching higher than gold's. In an ideal situation, perhaps a 20 trillion dollar market cap (2x as much as gold's) could be possible. In this case 1 BTC would be worth $952 380. Almost one million!
2. BTC as legal tender.
If every country were to accept Bitcoin as legal tender, it would be a massive milestone for the cryptocurrency, and it's likely that such a development would result in a significant increase in demand for Bitcoin, potentially driving its price higher. That said, one possible way to estimate a potential price for Bitcoin in this scenario is to compare it to the market capitalization of global M2 money supply, which represents the total amount of money in circulation. As of September 2021, the global M2 money supply is estimated to be around $95 trillion.
Assuming a hypothetical scenario where Bitcoin were to capture just 50% of the global M2 money supply, it would have a market capitalization of $50 trillion. With around 21 million Bitcoins in circulation, this would put the price of Bitcoin at around $2,380,950 per coin.
In conclusion, the amount of money in circulation in the world is estimated to be around $90 to $95 trillion, including physical cash and digital assets that represent money. As for the potential price of Bitcoin, it's difficult to predict with certainty, as there are many factors that could influence its value. One hypothetical scenario is that if Bitcoin were to capture just a fraction of the market capitalization of gold, say 10%, it would have a market capitalization of $1 trillion and a price of around $47,619 per coin. However, this scenario is purely hypothetical and does not guarantee future performance. Additionally, Bitcoin may have two potential roles in the future, either as digital gold or as legal tender. In the former scenario, a market cap of $20 trillion could be possible, with a price of almost $1 million per coin, while in the latter scenario, a hypothetical scenario where Bitcoin captures 50% of the global M2 money supply could result in a market cap of $50 trillion, with a price of around $2.4 million per coin. However, it's important to keep in mind that these scenarios are purely hypothetical and should be taken with a grain of salt, as there are many complex and unpredictable factors that could influence Bitcoin's price in the future.
