‘Extinguishing Capacity’: Bitcoin Could Swallow All M1 Fiat At $223K Per Coin
$223,186 is the price Bitcoin would need to be in order to convert the entire world supply of fiat currency, industry figures calculated July 2.
M1 Fiat Could Go At Less Than $250k
Part of an ongoing debate on social media, Blockstream CEO Adam Back and CSO Samson Mow joined Bitcoin Think editor Beautyon in discussing the phenomenon of ‘hyperbitcoinization’ – the as yet untested process by which consumers abandon fiat en masse for Bitcoin.
Despite Bitcoin trading around multi-month lows of $6000 this week, growth would not need to be huge for the cryptocurrency to create space for the entire global stock of government money (M1) – $4,686.91 billion.
Far from the more exuberant price forecasts for the next five years by the likes of John McAfee and Tim Draper, BTC/USD must expand to trade at $223,186.19 per coin to achieve “extinguishing capacity,” Beautyon concluded.
This, he added, “assumes an orderly conversion, without the inevitable Hyperbitcoinization event.”
The total amount of fiat in circulation is $4,686.91 trillion. https://t.co/Bhqc7O8piX that means to fit all the fiat into Bitcoin, $223,186.19 per Bitcoin is the "extinguishing capacity". And that assumes an orderly conversion, without the inevitable Hyperbitcoinization event.
— Beautyon (@Beautyon_) July 2, 2018
$5 Million For All M3 Fiat?
The numbers, however, can get bigger. The $223,186.19 causing excitement online is only correct on the basis of M1 money supply, other commentators note, and pales in comparison if M2 and M3 are added to the fiat bill.
To cater for that amount of fiat, Bitcoin would need to cost around $5 million, Back estimated.
In Q2 2018 meanwhile, Bitcoin bulls continue to peruse current fundamentals to placate naysayers who cannot foresee prices recovering or surpassing the all-time highs of December last year.
Research continues to regularly highlight belief among both lay investors and businesses, ‘HODL’ behavior combining with a wait-and-see approach to international regulatory improvements.
This week, Octagon Strategy became the latest financial player to go public about its bullish stance on Bitcoin, telling mainstream media that the “double-edged sword” of regulation would be the defining factor to push markets up once more.
For educator Willy Woo, however, the mainstream’s continued obituaries of Bitcoin are proof the industry does not understand it, with the cryptocurrency’s growth potential extending to “all companies and all GDP.”
“The media just doesn’t understand Bitcoin cannot be compared to companies,” he wrote.
If Bitcoin actually wins then all companies, all GDP, will exist within Bitcoin’s network valuation. I’m waiting for media to compare to M1 and M2 USD money supply. Give it a few years.
What do you think about Bitcoin’s fiat “extinguishing capacity”? Let us know in the comments section below!
Images courtesy of Shutterstock, Twitter, cryptografitti.com