Bitcoin’s Worth in the World Economy

With its concept appearing back in 2009, Bitcoin was promised to disrupt the world economy. Although it’s far from replacing fiat currencies, its role in the global financial system cannot be overstated. Let’s take a closer look at BTC in the context of the global economy and analyze Bitcoin net worth in 2019.

How Much is a Bitcoin Worth

BTC value in respect to the world money
BTC value in respect to the world money. Source: HowMuch.net

As we can see on the infographic, the global value of Bitcoin accounts for ~60% of the overall cryptocurrency value or 1/70 of the global gold reserve value (this is why the Bitcoin vs gold dominance is clear). The US dollar’s total value is 14 times bigger than Bitcoin’s total value. It needs to be pointed out that cryptocurrencies make up only 0.23% of all money in the world.

Judging from the perspective of the world’s entire reserve of money, Bitcoin accounts for a tiny fraction of it. However, from the perspective of individual or national fortune, BTC market capitalization seems to be a significant sum. For example, in 2018 Ukraine’s GDP equaled $112 bln, the total value of Bitcoin at the time. 

What is Bitcoin’s value in the global economy?

The position of Bitcoin on the financial market is becoming more stable every year despite the fact that digital money has begun its existence only recently. Day by day, the list of companies and countries recognizing BTC and digital money, in general, is growing. Bitcoin is gradually being established as a means of payment in both the online and physical worlds. 

The functions of ordinary money are being transferred to digital coins. However, some features are unique to cryptocurrency. These include storage, anonymous online payment, commodity exchange, and serious price fluctuations.

Thanks to the massive digitization of data, the advancement of the global economy to a new level becomes inevitable. The emergence of cryptocurrency is natural, it is a new logical step on the way to a fully digitalized world. The influence of digital currencies intensifies and leaves an imprint on the national economy and global monetary turnover. It is impacted by the following factors:

  • Investing crypto money has a higher revenue potential in comparison with other currencies.
  • Digital money is free: Bitcoin and other cryptocurrencies do not have permanent centralized owners, while fiat money is tied to the economic and political situation of a country.
  • The price of Bitcoin depends purely on demand. Having a lot of advantages over fiat money, cryptocurrencies are becoming more and more popular: they are being implemented in various industries and areas. 

Bitcoin’s Worth Throughout History

BTC all-time price history
BTC all-time price history

Bitcoin began its ascent to the top in May 2013. Its price began to rise from the level of $90, and in about three weeks, it increased to $134 but then was followed by a rollback. As a result, by July 6 the first cryptocurrency fell almost twice in price, to $69. In the next six months the asset grew by 1571%: a maximum (at the time) of $1,153 was recorded on December 5, 2013. The bull market lasted for five months.

After that, in two weeks, the cryptocurrency fell by 50% to $552, but by January 7, 2014, Bitcoin rose to a $1000 mark again, but the bears interfered. 

In 2015, the price of cryptocurrency fell but would sometimes rise for short periods of time. The crypto community witnessed a serious nosedive to $173 by January 17, 2015 and an 85% drop in 12 months. The rate could not recover from such a sharp decline until October that year: it did not exceed $300 but also did not fall below $200. On August 25, 2015, it was trading at $205, and after 2.5 months, on November 4, it traded at $488.

In June 2016, the value of Bitcoin exceeded $761, in March 2017 it updated the previous historical maximum and rose to $1,274 for the first time. On December 17, 2017, Bitcoin was trading at $ 19,974. If you check BTC worth graph, you will understand that this record hasn’t been broken so far.

As a result, by rough estimates, the bull market lasted for 28 months: from August 2015 to December 2017. During this time, the price of cryptocurrency increased by 9884%.

In 2018, the bear run affected the entire digital money market: Bitcoin rate began to plummet. By February it was below $7,200, and on December 16, 2018 fell to as low as $3,200. The fall over 12 months was 84%, the same as four years earlier.

BTC price chart 2019
BTC price chart 2019

During 2019, BTC made its way to $6,000 in spring. In June, it almost touched the $13,000 level, but the bull run didn’t last long. It gradually fell to $8K by November and has been around $,7,200-7,600 during the last weeks.  

Cryptocurrencies in the World Economy

  • Ethereum (market cap: $13 762 170 080) is the world’s first blockchain that implements smart contracts. It has become increasingly popular thanks to technological advances and a wide sphere of application. Today, ETH is the world’s second largest cryptocurrency by market cap, and the coin is used not only in dApps but also in trading. 
  • XRP (market cap: $8 226 360 909) appeared in 2012 as a product that addresses the needs of enterprises. The main goal of XRP is to provide institutions (payment providers and banks) with greater security and convenience for international transactions. XRP has a great advantage over many other currencies – liquidity. Former Ripple CTO Stefan Thomas claimed that XRP transactions will be performed up to 1,000 times (or more) faster than Bitcoin transactions.
XRP transaction speed
XRP transaction speed
  • EOS (market cap: $2 404 400 602) cryptocurrency was developed by Block.one with the participation of Dan Larimer (co-founder of Bitshares and Steemit) and Brendan Bloomer. EOS-coin was launched to provide Eosio, open-source decentralized operating system for software developers. In many ways, EOS is similar to Ethereum, since it is built on its basis but with significant improvements. For example, EOS does not require micropayments to manage its software. 
  • Stellar (market cap: $901 018 586) has become one of the leading digital currencies on the planet: it was designed to simplify the financial transactions between cryptocurrencies. The cost of services increases by a fixed 1% per year, which is much lower than the long-term annual rate even in the USA (2-3%). Unlike XRP, Stellar is decentralized and built on a consensus algorithm that makes transactions more “seamless.”

Bottom Line

The worth of BTC continues to grow day by day, and we are talking not only about its price and market cap. The cryptocurrency is playing a crucial role in the remodeling of the modern financial sphere – the world is going digital, banks are starting to rely on online transactions and more technically advanced solutions. Taking into account the fact that BTC is not regulated by any party, this crypto asset may soon achieve the same significance as gold or US dollars.