Discreetly, but surely, Bitcoin is essential in global monetary architecture. The flagship asset of cryptos has just crossed a symbolic threshold: its capitalization is now equivalent to almost 1.7 % of the planetary money supply. A weight still limited in the face of state currencies and precious metals, but revealing a deep trend: the ascent of a decentralized asset within a system dominated for decades by fiduciary currency and traditional reserves.
In short
- Bitcoin now reaches 1.7 % of the global money supply, according to an analysis of River.
- This estimate is based on a comparison between the capitalization of the BTC (2.29 T $) and a global monetary basket of $ 138 t (M2 of the main currencies + gold).
- River voluntarily excludes money, platinum and other industrial metals so as not to distort the analysis.
- This rise in power of the BTC testifies to the growing interest in decentralized assets in the face of the erosion of the purchasing power of Fiat currencies.
The growing weight of bitcoin in the world money supply
The American company River, specializing in financial services linked to Bitcoin, has published a comparative analysis between the capitalization of the BTC and all the world monetary masses, while the asset has just bounced after the speech of Jerome Powell.
According to his calculations, “In 16 years, Bitcoin rose to 1.7 % of the world money supply”based on an overall basket of 112.9 Billions of dollars of Fiat (M2) and 25.1 Billions for gold, excluding money and industrial metals.
This estimate is based on market capitalization temporarily affected by the BTC earlier this month, or 2.4 trillions of dollars. Currently, the valuation of the bitcoin is around 2.29 trillions, which slightly adjusts its share to around 1.66 %.
This figure, although marginal compared to total volumes of world liquidity, reveals a notable evolution. Bitcoin, originally designed as a response to the 2008 financial crisis, is gradually integrating the spectrum of major monetary asset classes. Several key elements make it possible to contextualize this progression:
- The capitalization of the BTC: approximately 2.29 trillion of dollars, against a total of 138 t $ (Fiat + gold coins) analyzed;
- The current share of Bitcoin in the global money supply: 1.66 %, with a peak at 1.7 % reached in early August;
- The methodology used by River: aggregation of M2 monetary masses of the main global currencies, combined with the valuation of physical gold stock;
- A voluntary exclusion of certain metals: money, platinum and palladium are not integrated into comparisons to avoid biases linked to industrial uses;
- Macroeconomic issues: the continuous dilution of Fiat currencies fueling interest in limited emission assets, such as Bitcoin.
In a world where expansionist monetary policies remain the norm, this paradigm change deserves increased attention. The rise in power of Bitcoin, even partial, constitutes a concrete indicator of the slow, but tangible mutation of the confidence granted to traditional currencies.
A Powell speech that makes Bitcoin jump
During the highly anticipated speech to the Jackson Hole symposium, the president of the American federal reserve, Jerome Powell, delivered a message carefully scrutinized by the markets.
“Our master rate is now 100 basic points closer to a neutral rate than it was a year ago”he said, before clarifying that “The stability of the unemployment rate and other labor market indicators allow us to take carefully in the adjustment of our monetary position”.
These remarks were interpreted as an implicit opening to a future drop in rate, strengthening the probability of a short -term monetary pivot.
Such a monetary relaxation prospect had an immediate effect on the Crypto market. In the space of a few hours, the price of Bitcoin recorded an increase of more than 2 %, reaching a peak around $ 116,000.
This reaction consistent with the dynamics observed in recent years, in a context of expansion of global liquidity, cryptos have often benefited from favorable conditions. According to CME Group data75 % of investors now anticipate a decrease of 25 basic points in September.
The correlation between American monetary policy and the evolution of cryptos challenges the nature of Bitcoin in the global financial ecosystem. If it continues to react positively to softening signals, this could strengthen its stature of assets sensitive to liquidity, like gold, even technological actions. However, unlike the latter, Bitcoin also benefits from its deflationary nature, which gives it a hybrid status, between reserve of value less volatile than actions, and bet on the future of a post-banking finance. The evolution of its part in the global money supply and its sensitivity to the decisions of central banks reveal a future where the fed policies will have as much impact on bitcoin as on traditional currencies.
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