In a sense, bitcoin’s value is derived from our common belief that bitcoin has value. The same is true of the American dollar, the British pound, and the European Union’s euro, as well as nearly every other modern currency. Historically speaking, up until August 15 th 1971 most currencies were backed by a commodity, usually gold or silver. Have fun playing Bitcoin Blast and cash out REAL Bitcoin! Not only is this match-three mobile game fun to play, you will get rewarded with Bling Points that can be exchanged for Bitcoin. The amount you receive will be very small, but the more you play, the more you will earn! The only requirement is that you register and login before playing. Bitcoin and other cryptocurrencies have been anything but stable through much of their history. For example, while Bitcoin traded at close to $20,000 in December 2017, its value then dropped to as. The spike in 2013 was driven by speculation, people were pumping money into Bitcoin as it was this new revolutionary money, and then the markets crashed from a global high of $15.7bn on Dec 5th.

Key Highlights

Global wealth is estimated at just over $1 quadrillion, while Bitcoin's market cap is just over $1 trillion. Bitcoin thus represents 0.1% of global wealth.
Like gold, Bitcoin, is considered by many investors as a hedge against government policies such as quantitative easing, capital controls, and negative interest rates. Like gold, Bitcoin is a non-national currency.

Bitcoin’s Market Capitalization

The market capitalization or market cap of an asset is the total value of all of its outstanding shares. The market cap of a given asset is thus the product of the total supply of shares and the price. At the time of writing, there exist approximately 18.7 million bitcoin at a price of $57,000, yielding a market capitalization of roughly $1.07 trillion.

How Much Would It Cost to Buy All Existing Bitcoin

Market capitalization is a useful and common metric for measuring an asset’s relative size, but it is not an accurate measure of the cost of the entire asset. Although Bitcoin’s market cap is currently around $1 trillion, it would be impossible to purchase all existing bitcoin for $1 trillion.

This is due to the fact that not every holder of Bitcoin is willing to sell at the current price point. Additionally, many bitcoin are thought to be lost forever by people who lost their private keys or died. Satoshi Nakamoto, Bitcoin’s creator, disappeared in 2011, possibly leaving over 1 million bitcoin unspendable. These lost coins are still counted by most market cap calculations.

If an entity with $1 trillion decided to attempt to buy the entire supply of bitcoin, they could place an order to buy $1 trillion worth of bitcoin at the current price of $48,400. All orders to sell bitcoin for $57,000 would be executed. After that, the buyer would be forced to raise their price and buy out all holders willing to sell at $57,001. This process would continue at an accelerating pace, and the price of Bitcoin would skyrocket. Each bitcoin purchased by the buyer would come at a higher price, until their $1 trillion was exhausted.

➤ Learn more about order books.

How Much Money Is in the World?

The global equities market represents some $90 trillion in assets—gold, silver, and other precious metals account for another $12 trillion. The world’s total M2 money supply—all the physical cash in circulation plus deposits, promissory notes, and other liquid money instruments—is upwards of $40 trillion. Global real estate accounts for $30 trillion in assets. When you include other forms of investment, global debt, and financial derivatives, the world’s total wealth tops at somewhere just over $1 quadrillion or $1,000,000,000,000,000.

How Much of the World’s Money Is in Bitcoin?

In the scope of the world’s wealth, the value held in Bitcoin is miniscule. If we assume that this quadrillion roughly represents the total value of assets in the world, then Bitcoin represents 0.1% of all wealth in existence.

➤ Learn more about what makes Bitcoin valuable.

What Drives the Price of Bitcoin?

Many factors influence Bitcoin’s price, and there are a variety of players with skin in the game, from high net-worth traders to smaller holders. One of the primary drivers for growth since Bitcoin’s 2017 bull run has come from the expectation that Bitcoin could be a hedge against monetary inflation and centrally planned economies.

Some investors are treating Bitcoin like a form of digital gold: a non-national bearer instrument that provides a decentralized, free-market alternative to current central bank monetary policy.

This is the rationale behind the investment theses of investors like Paul Tudor Jones and Stanley Druckenmiller, two wealthy hedge fund managers who announced their Bitcoin positions in 2020.

Ultimately, Bitcoin’s price is determined by the same market factors that determine any commodity or asset price: supply and demand. As more users enter the network and its market, the price theoretically should rise over time, given Bitcoin’s scarcity. Only 21 million will ever be minted, and the annual inflation rate—how many are minted each year—is cut in half roughly every four years.

➤ Learn more about Bitcoin halvings.

Last updated May 4, 2021

Is Bitcoin Real Money?7 min read

Reading Time: 5minutes

As the adoption of Bitcoin grows and it continues to gain acceptance across the world, it’s important to consider what makes it a superior form of money. For something to be considered money, it must perform three primary functions:

a store of value
a medium of exchange
a unit of account

What makes Bitcoin a good store of value?

In order to evaluate Bitcoin as a store of value, it helps to consider the history of money. Over the course of human history, there have been several iterations of money such as cattle, animal pelts, mollusk shells, precious metals, and the coins manufactured from these metals. The underlying principle behind why these items were considered valuable was the fact that they were scarce at the time. These items became less scarce over time and of the precious metals used as currency, gold was found to be the most scarce since it is one of the rarest naturally occurring metals on earth, and mining it is difficult and dangerous. As we’ll discuss later in this article, the amount of gold mined every year is a small percentage of the total supply of gold in the world. This is what made it a good store of value and useful as a currency.

However, gold can also be heavy and hard to transport which is why it started being used in the form of coins. The problem with coins was that traveling with a large amount of them could be a security issue because if anyone came to know about them, the traveler would become a target for thieves and robbers. Additionally, they could be counterfeited and a regular person would not have the knowledge or equipment required to verify that they were real which led to people relying on goldsmiths as safe-keepers and verifiers because of the inability to verify it themselves. In return for their deposit, the goldsmith would give them a receipt and if the goldsmith was well-known and reliable, this receipt could itself be used as currency because it was redeemable for gold. This is how gold-backed paper currencies became popularized and were used for centuries.

Governments realized that having currencies backed by gold was restrictive to their monetary and fiscal policies so, in the 1970s, the US followed by the rest of the world abandoned this gold standard in favor of the fiat currencies they use now. Fiat currencies are currencies that are no longer redeemable for a scarce and valuable asset but instead are supposed to hold value because of the authority of the governments that issue them. This makes it easy for governments to create new money for spending but is an issue for citizens because the creation of new money diminishes their purchasing power. For example, the US government has increased the money supply by over 25% just in 2020 from $15.33 trillion at the end of 2019 to $19.19 trillion at the end of 2020, which will undoubtedly lead to inflation and loss of purchasing power for citizens. Despite moving away from the gold st

How Much Real Money Is In Bitcoin