# How does total value of bitcoin compare with money supply of Peru, Turkey, Tajikistan and China?

## How does the bitcoin economy compare to the amount of money in circulation in Peru, Turkey, Tajikistan and China?

Sep 3, 2013 at 8:41 a.m. UTC
Updated Sep 10, 2021 at 11:30 a.m. UTC

It’s been commonly reported in the media that the total value of bitcoin in circulation is well over \$1 billion. But what does that mean? For bitcoin, this is normally calculated by market capitalization, which is a figure that is normally attributed to the total valuation of a stock. You take the total shares outstanding and multiply that by the stock price. Google, for example, currently has a stock price of \$866.39 as of 26th August. Multiply that price by 333.22 million shares, and you get a market cap number of \$288.6 billion for the company. Personally, I’ve long been wary of calculating bitcoin by market cap. The reason? It’s not a stock, and behaves much differently which makes it hard to determine valuation in that way. Recently, however, a report by the International Monetary Fund regarded bitcoin as a “private currency”. Indeed, around the same time the German government indicated they had come to the same conclusion, deeming it a private unit of exchange.

That got me thinking. What if I took the market capitalization of bitcoin and compared it to some countries? What is bitcoin actually worth when compared to certain fiat currencies? To do this, I took the M2 money supply of a few countries and compared it to bitcoin’s market capitalization to get these figures. It’s not a perfect comparison. For example, countries actually produce goods and services, as reflected in gross domestic product, which I have also included. But this can give some idea of how bitcoin stacks up against national economies. The most recent reports of M2 money supply come from July 2013, so I took the high market cap of bitcoin from July, which was \$1,166,486,326 according to Blockchain.info. Money Supply data came from Tradingeconomics.com, which obtains that data from central banks, while GDP numbers were 2012 figures from the World Bank.

## Peru

Denomination: Nuevo Sol July 2013 Money Supply: S/135,817,000,000 Value in USD: \$48,273,149,003 Value in EUR: €36,210,888,744 Gross Domestic Product: \$197,110,985,682 Bitcoin economy’s value as a percentage of money supply: 2.4%

## Turkey

Denomination: Lira July 2013 Money Supply: Kr808,019,879,000 Value in USD: \$394,823,596,704 Value in EUR: €296,111,144,816 Gross Domestic Product: \$789,257,487,307 Bitcoin economy’s value as a percentage of money supply: 0.3%

## Tajikistan

Denomination: Somoni July 2013 Money Supply: TJS 5,268,877,000 Value in USD: \$1,105,236,388 Value in EUR: €829,112,926 Gross Domestic Product: \$6,986,537,406 Bitcoin economy’s value as a percentage of money supply: 105%

## China

Denomination: Yuan Renminbi

July 2013 Money Supply: ¥105,239,000,000,000 Value in USD: \$17,192,551,355,549 Value in EUR: €12,905,315,255,957 Gross Domestic Product: \$8,227,102,629,831 Bitcoin economy’s value as a percentage of money supply: 0.0067%

## Things to note

One thing to keep in mind here: unlike bitcoin, none of these currencies can be considered a private currency. Let’s not forget that fiat-based money is under the influence of central bankers. These are officials who have the ability to change supply and lending interest rates, generally in order to stave off inflation and other economic factors. The reality is that, while some believe bitcoin is not real money, this comparison shows that BTC has real worth. Gold, for example, is not real money. It’s not a unit of exchange like bitcoin is. You cannot give Foodler a portion of an ounce of gold for food delivery. You can, however, give Foodler the current fiat-exchanged amount of bitcoin to satisfy your hunger pains. The problem? Unlike fiat, bitcoin is still not a commonly used method of exchange. Maybe someday in the future it will be, but for now you cannot simply go to any store and pay for items with bitcoins. What may be more likely, at least in the short term, is that perhaps bitcoin will simply be used as a means of transmitting value throughout the financial system. Only time will tell. What do you think about the value of bitcoins versus fiat? Could bitcoin be more valuable than fiat over time because it is math-based and decentralized?

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