Abstract
The total market capitalization of the most popular cryptocurrency, Bitcoin, reached one trillion dollars in 2021, equivalent to more than 1 percent of the world’s GDP. At the same time, in recent years, central banks have increased their money supply on an unprecedented scale. The volume of money supply between 2009 and 2019 has increased over 1.5 times more than between 1999 and 2009, while it has been 3.2 times more than in the years 1990 and 1999. In this chapter, a question was raised whether the monetary easing and the consequent increase in the worldwide money supply have contributed to the rapid development of the virtual currency market. To this extent, the effect of money supply was analysed measured by M2 in 16 countries on several virtual currency market indicators such as: Bitcoin capitalization, Bitcoin price, Google trends, number of cryptocurrencies, and number of transactions over the period 2008–2019. In this chapter, it was proved that quantitative easing has spurred the development of the virtual currency market; however, there are significant differences in the contributions of individual countries to this effect.
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