Cryptocurrency Is Now Worth More Than All US Currency in Circulation – Futurism

Experts warn it could be a sign of a bubble. Crypto Vs Cash

Cryptocurrency has hit a significant milestone: Its now worth more than all US dollars currently in circulation.

Cryptocurrencies hit a valuation of $2 trillion on April 29, according to The Wall Street Journal. Thats about the same valuation as all US dollars in circulation. However, it has since hit as high as $2.25 trillion and in the process actually exceeding dollars in circulation.

While the stat is incredibly fascinating and a solid indicator of cryptocurrencies growing popularity, its also a little misleading.

Thats because US dollars in circulation isnt all US dollars. After all, circulation refers to just physical cash and coins.

Its the same way that the cash in your pocket doesnt represent all of the money you have (hopefully). Most of your cash like the US dollar isnt liquid. It exists in banks, investments, and other intangible assets.

So while cryptocurrencies might be worth more than all the physical dollars and coins out there, it definitely is not worth more than all the money out there.

Cryptos boom is a part of a trend across numerous investment classes and categories such as real estate and green energy, according to the WSJ. Much of it is fueled by rock bottom interest rates from the Federal Reserve.

However, the Fed is indicating that we might well be in bubble territory, saying that valuations are generally high and are vulnerable to significant declines should investor risk appetite fall, progress on containing the virus disappoint, or the recovery stall in a May 2021 stability report.

So as with all things finance related, hope for the best and prepare for the worst. Also take heed from one of Elon Musks more measured takes: Dont go investing your life savings in assets like crypto. If you do, youre going to be in for a rough time if (and when) the bubble finally pops.

READ MORE: What Happens to Stocks and Cryptocurrencies When the Fed Stops Raining Money? [The Wall Street Journal]

More on cryptocurrencies: Bitcoin Crashes, Wiping Over $200 Billion Off Crypto Market

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Cryptocurrency Is Now Worth More Than All US Currency in Circulation - Futurism

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