Published On: Sun, Feb 26th, 2017

At What Price Will Bitcoin’s Market Cap Equal Gold & Reserve Currencies?

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Bitcoin is money so it does not have a market cap. So how can we determine at what price point will Bitcoin match the total money supply value of precious metals and global reserve currencies?
Bitcoin: Market Cap or Money Supply?
First off, a disclaimer. Definition of market cap:

Market capitalization is the market value of a company’s outstanding shares. This figure is found by taking the stock price and multiplying it by the total number of shares outstanding. — Investopedia

Bitcoin is not a company. There are no shares in Bitcoin. It does not have a stock price. It does not have a market cap.
Bitcoin is money. It makes as much sense to talk about the market cap of Bitcoin as it does to refer to the market cap of the dollar. The dollar and Bitcoin have Money Supplies (MS). It is best to analyze their markets using classical comparative-static Monetary Economics. The Supply of Bitcoin is perfectly inelastic (vertical Supply curve). Supply increases by 12.5 Bitcoin (curve shifts right) every 10 minutes. The Demand for Bitcoin is a Demand for Money.
Having got that out of the way, the terms Money Supply and Market …

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