With Bitcoin (BTC) rising to $ 14,000, the market value has surpassed the monetary base of the Russian ruble. This figure includes both physical and cash reserves, which are usually held in the country’s central banks.
The estimated market price of Bitcoin is in line with the largest financial rules in the world. Source: Crypto Voices
The above chart may seem daunting at first, but it simply compares gold, silver, and Bitcoin to the remaining financial bases in the world. We see that the United States has 4.9 trillion dollars in banknotes, coins and bank deposits at the Federal Reserve. When we divide that number by the current 18.5 million BTC, we get $ 263,000 as shown above.
For Bitcoin’s market value to match the US monetary base, the price must exceed $ 263,000. Although this may seem far fetched, BTC has already darkened several sovereign currencies such as the Brazilian Real, Swedish Krona and South Korean Won.
This step is no small feat for an 11-year-old cryptocurrency. According to Fernando Ulrich, economist at Crypto Voices, the top 30 competitors by base monetary base cover 95% of GDP. In addition to the euro, which is in force in many countries, some of the 113 largest countries are linked to the US dollar.
Crypto Voices researchers concluded that:
So far, monopoly money works for central banks and their governments. That’s almost free: Fiat turns out to be almost “unlimited” in the market value of gold. ”
The researchers confirmed by saying:
“As for Bitcoin, if and when it gets large enough to be on this chart and / or are held by central banks, then only, will we have any idea of the value of Bitcoin to central banks?”
Some might interpret this analysis as bearish, but it is actually the opposite.
Crypto Voices researchers concluded that until now, central banks and governments have maintained their ability to print money independently of gold holdings. Therefore, it is not necessary to search for a new “gold standard” or something like that.
As scholars beautifully summarize, inflation is gradually reducing the value of fiat currencies. This led to Bitcoin overriding a number of currencies as they succumbed to excessive pressure. In fact, 2020 was the largest global increase in the financial base ever.
As explained above, the global money supply increased by $ 5.5 trillion in 2020. That is an increase of 28%, while Bitcoin has kept the calendar in half by cutting emissions by 50%.
I’m looking forward to
The big question that worries investors is whether the bitcoin equity behavior model will prevail. According to some critics, there are many errors in assuming that BTC will reach $ 100,000 and beyond in 2021 and beyond.
The ruble is down, like many other sovereign currencies, so all eyes are now turning to the Canadian dollar. As shown in the underlying money graph, the Canadian dollar has a cash base of $ 335 billion, which is equivalent to the bitcoin price of $ 18,000.