Jameson Lopp, the man who fills the role of lead developer at BitGo, a Blockchain security company, has carried out a calculation which evaluates just where Bitcoin stands, in terms of its relative value, in relation to other major currencies. Lopp’s calculations, based on a clone money aggregator M1 index that he created, puts Bitcoin at 32nd in value in the world money supply.
This puts Bitcoin just above Singapore and South Africa, and just below Finland and the United Arab Emirates, in the world currency value league table. In Lopp’s index, narrow money is used as a metric to determine the value of a currency. The ‘narrow money’ of a country is every piece of existing currency, from paper money, to coins, to electronic currency in bank accounts. Any liquid assets owned by a nation’s central bank are also considered. Using this metric, Lopp arrives at a figure of $122,406,125,890 for Bitcoin.
Bitcoin, along with anything cryptocurrency related, poses a problem for economic analysts, in that it operates as both a commodity and a currency on world markets. This makes it tricky to classify properly, and therefore to assess its economic impacts accurately. A recent decision by the CME Group to sell Bitcoin futures, has helped its value to rise. But it also benefits from being like a currency, due to its liquid nature.
Nevertheless, predictions have been made from some quarters that the total market share for cryptocurrencies could breach the $1 trillion mark in 2018, with much of that growth directly linked to the original cryptocurrency, Bitcoin. Once it reaches that point, Bitcoin has to be considered a major player on the world currency markets. A $1 trillion market cap would put Bitcoin in eighth place on world currency value lists, ahead of Spain and just under Italy, which is the lowest ranked country with $1 trillion worth of narrow money.