Money Supply
The money supply is a measure of all the money that is available in an economy.
The money supply is a measure of all the money that is available in an economy. Money can be classified in several ways, with each one resulting in a different money supply. The strictest classification, M0, refers exclusively to actual cash.
M0 is also known as the monetary base. Banks can extend the money supply beyond the monetary base through lending. M1 is M0 plus “cash equivalents” which can be easily converted into cash.
This generally references people’s deposits in bank accounts. M2 is M1 plus “near-cash” assets that can be converted into cash relatively easily, such as savings accounts or short term investments. There are other measures of money supply with different classifications of money.
Money Supply is a monetary concept that describes properties, forms, or dynamics of money and currency systems. Onramp's glossary explains Money Supply to help investors understand how Bitcoin compares to and interacts with traditional monetary systems.
Frequently Asked Questions
What is Money Supply?
Money Supply describes a fundamental aspect of how money and currency systems function. It is a key concept for understanding the historical evolution of money and Bitcoin's role as a new form of monetary technology.
How does Money Supply relate to Bitcoin?
Bitcoin was designed to address many challenges described by Money Supply. With a fixed supply of 21 million coins and decentralized issuance, Bitcoin offers an alternative to traditional monetary systems.
How does Onramp help investors understand Money Supply?
Onramp's glossary and educational resources help investors understand monetary concepts like Money Supply and how they inform Bitcoin's value proposition as a long-term store of value.
