Right. On the one hand, we're comparing the U.S. dollar value of all crypto-assets, and on the other hand we're counting the amount of paper currency and coinage.
Given that crypto-assets do not have a physical form, why compare on this basis?
Well, that's obvious. If you look at a more-comparable monetary stock measures (say, M2, which includes dollars in checking, savings, small time-deposits and liquid money market funds) you find that the U.S. dollar number is more like $20tn and it looks a lot less exciting.
Let's also ignore the fact that the "market cap" of a crypto-asset in U.S. dollar terms is not a cash equivalent because, and let me go out on a limb here, if you tried to find a buyer for every bitcoin in circulation your VWAP would not be the current spot price.
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In this context, "currency in circulation" refers specifically to coins and paper notes, not electronic or accounting forms of dollars.
Right. On the one hand, we're comparing the U.S. dollar value of all crypto-assets, and on the other hand we're counting the amount of paper currency and coinage.
Given that crypto-assets do not have a physical form, why compare on this basis?
Well, that's obvious. If you look at a more-comparable monetary stock measures (say, M2, which includes dollars in checking, savings, small time-deposits and liquid money market funds) you find that the U.S. dollar number is more like $20tn and it looks a lot less exciting.
Let's also ignore the fact that the "market cap" of a crypto-asset in U.S. dollar terms is not a cash equivalent because, and let me go out on a limb here, if you tried to find a buyer for every bitcoin in circulation your VWAP would not be the current spot price.