Credit rating agency Fitch has chimed in on bitcoin, calling it small in comparison to traditional payment processors like VISA and MasterCard, along with global currencies. This news, which many in the community would call “blatantly obvious” originated from the Fitch Ratings Why Forum commentary that was published on Wednesday.
With reference to transactions:
Total Bitcoin transactions averaged $68 million per day in February 2014, a more than 10 fold increase compared to February 2013. By comparison, payment processors Western Union and PayPal averaged $225 million and $492 million respectively in transaction volumes per day during 2013. Bitcoin’s transaction volumes are less significant compared to the major credit card companies.
With reference to trading:
From a trading perspective, Bitcoin transaction volumes relative to the stock of outstanding bitcoins resemble those of equity securities. There was about $68 million in average daily transaction volume in Bitcoin in February 2014 relative to its $6.75 billion money supply, or approximately 1% of total market capitalization was traded per day.
Fitch says that “an analysis of a sample of the largest U.S. equity securities shows that daily trading volumes were approximately 0.6% of total market capitalization,” and that bitcoin’s market cap is less than 1 percent of total United States dollars, pointing out that bitcoin is more on-par with the Guatemalan Quetzal.
The commentary, entitled Sizing Up Bitcoin, looks into several different matters, among which include bitcoin as a currency, investment, and regulatory developments in the space. You can read the analysis in full here.