This week, on three-day bitcoin charts, the 100- and 200-period MAs formed the bull cross for the first time in three years. The bulls so far have not been able to take advantage of the situation and organize a breakthrough:
This week, on three-day bitcoin charts, the 100- and 200-period MAs formed the bull cross for the first time in three years. The bulls so far have not been able to take advantage of the situation and organize a breakthrough: cryptocurrencies are still stuck somewhere under the $ 8,300 mark.
However, this sluggish dynamics does not bother crypto enthusiasts at all, they are already fantasizing about possible scenarios for their favorite digital asset.
Everything started on Twitter as always, when one of the users (@themooncarl) asked what would happen if bitcoin somehow destroys all the fiat currencies in the world and captures all of their total market capitalization.
The answers, although they were clearly speculative in nature, were interesting enough to attract even some influential industry representatives to the discussion.
Bitcoin on the way to seven-digit numbers
The initial tweet, in which the author raises this issue, began with the assumption that the net worth of all currencies in the world is about $ 100 trillion. If they all disappeared, the cost of bitcoin would have reached $ 5 million per coin.
Of course, these are very simplified calculations based on dividing the total amount of degass in the world by the maximum number of bitcoins (21 million coins).
But then it’s hard to focus on one specific figure, given the intrinsic complexity of the global monetary system. Even government agencies and banks cannot tell the exact amount.
For example, as of 2017, the Bank for International Settlements (BIS) stated that the total amount of money in the world fluctuates somewhere around $ 5 trillion. This is the so-called money supply M0, that is, just all the world's money in circulation.
According to other estimates, this amount reaches $ 80 trillion, since it includes money in the broad sense of the word (M3). And between them there is also M1 (this is M0 plus all demand deposits) and M2 (all the same as M1 and small savings and term deposits).
Despite the inconsistencies, the discussions that unfolded under the post are really entertaining.
Soon another user, a popular analyst @filbfilb, noted that in fact, bitcoin will cost much more if debt is also added to this formula.
Mati Greenspan, author of Fintech’s Comprehensive Guide and senior analyst at eToro, entered the debate, saying at least $ 3-4 quadrillion is spinning around the world. Most likely, he also added derivatives and the like to the M3.
There were those who claimed that bitcoin would fill the void left after fiat money, not alone, but in conjunction with other digital currencies. This means that its cost is unlikely to reach $ 5 million.
Be that as it may, the question remains open: what will happen to the global economy if bitcoin suddenly replaces all fiat money before the problem of its scalability is solved.
Write what you think about this in the comments.
Images courtesy of Twitter, Shutterstock.