Bitcoin is taking over the world. Its rapidly rising value is making it bigger than some major financial companies, some big currencies and many of the world’s countries. Or so the bitcoin cheerleaders say.

Bitcoin’s market capitalization currently stands at around $278 billion, according to coinmarketcap.com. That puts it ahead of Citigroup Inc. and Visa Inc. Bitcoin enthusiasts say the digital currency’s market cap has surpassed the gross domestic product of midsize countries such as Finland and Greece.

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Bitcoin is taking over the world. Its rapidly rising value is making it bigger than some major financial companies, some big currencies and many of the world’s countries. Or so the bitcoin cheerleaders say.

Bitcoin’s market capitalization currently stands at around $278 billion, according to coinmarketcap.com. That puts it ahead of Citigroup Inc. and Visa Inc. Bitcoin enthusiasts say the digital currency’s market cap has surpassed the gross domestic product of midsize countries such as Finland and Greece.

These comparisons are dubious. Bitcoin’s market cap is simply its current price in dollars, times the total number of Bitcoins currently in circulation. But it makes little sense to compare this to the market capitalization of businesses like Citigroup or Visa, currently $201 billion and $255 billion, respectively. Market capitalization measures the equity value of a business, or what investors are willing to pay for its future profits. Bitcoin isn’t a business and has no profits.

This comparison gives an exaggerated impression of Bitcoin’s relative size. For Citigroup, the more apt comparison would be to its total assets, which were $1.8 trillion at the end of September. For Visa, the more interesting comparison would probably be the amount of payments processed by the card network vs. Bitcoin’s blockchain. There are currently around 337,000 Bitcoin transactions a day, according to blockchain.info. Visa processed 468 million transactions a day in the three months through September.

In other words, on any valid comparison to established global financial institutions, Bitcoin is still small fry.

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Comparisons to national GDP figures are the equivalent of comparing two random numbers. Tallying up all of the timber and machinery that Finland produces in a year relative to the global value of existing bitcoins is meaningless.

What about major currencies? Total U.S. dollars in circulation amounted to $1.59 trillion as of November 15, according to the Federal Reserve. But this is a very narrow measure of U.S. dollar supply, consisting primarily of physical notes. A broader measure of money supply called M3, which includes money-market funds, short-term repurchase agreements and other liquid assets, stood at $13.7 trillion at the end of September. Even this is likely too narrow, however, as it excludes a multitude of U.S.-dollar denominated assets. The U.S. economy’s total assets in 2016 came to $220 trillion, according to Federal Reserve flow of funds data.

There is confusion over how to measure bitcoin because there is disagreement over whether it is a currency, a method of settling transactions, or a speculative asset. Each would suggest a different benchmark. For now it is mostly just the latter. Beware of specious comparisons that overstate its importance.

Write to Aaron Back at aaron.back@wsj.com

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