How much is “two bits” and where did the phrase come from?

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Question: How much is “two bits” and where did the phrase come from?

Answer: Two bits is commonly understood in America to be one quarter. The word “bit” long meant, in England, any coin of a low denomination. In early America, “bit” was used for some Spanish and Mexican coins that circulated and were worth one-eighth of a peso, or about 12 and one-half cents. Hence, two bits would have equaled about 25 cents.