Information Economy 2.0

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Bitcoin is a Trillion $ Economy



Steven Mnuchin, Louise Linton, Leonard Olijar








Velocity of M2 Money: Federal Reserve of St. Louis

For bitcoin the velocity is much higher. It turns over about 20 times a year, V = 20. Today the money supply or market cap for bitcoin is about $158 billion. With a velocity of 20, that translates to a bitcoin economy that is over $3 trillion. That amounts to around 16% of US GDP (roughly equal to annual health care expenditures) and more than the GDP of The Netherlands. Bitcoin is not usually described in such terms, but this is a measure of the vibrancy of the economy for the cryptocurrency.

Many cryptocurrencies have even higher velocities. Bitcoin Cash, which has only been in existence a few months, has a velocity of 28 and a total economy of over $700 billion, similar to the GDP of Switzerland. The world economy of cryptocurrencies exceeds about $9 trillion. This is about twice the GDP of Japan.

While cryptoeconomies are much less developed and have high levels of speculation, the overall size is indicative of the great potential they provide utilizing “Money in the Internet”.


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