A very simple, easy, logical calculation why Bitcoin may reach $100000 Or Even More Pretty Soon - Based on world money supply

in #bitcoin7 years ago (edited)

Ok guys, it took me really long to write this article, but it'll take about 2 minutes of your lifetime to read it, but - believe me - it's worth it. It will give you some amazing insights that you've probably never saw and though about before about Bitcoin and it's future.
After reading this post, you'll probably overthink your investment strategy completely.

Here are some fast facts before starting with the calculation:

  • Currently, there are about 16.3 million Bitcoins available (current supply).
  • The rest of the 21 million bitcoins, (21-16.3=4.7) the remaining 4.7 million Bitcoins will be mined over the next hundred years, because that's how the mining algorithm of bitcoin has been programmed.
  • About 1 million Bitcoins are on a single wallet and have never been moved since the creation of Bitcoin. No one knows whom that wallet belongs, some say that it belongs to the founder of Bitcoin himself - the anonymous guy named Satoshi Nakamoto - and some say that even if it belongs to Satoshi, what'll happen if Satoshi dies/has died already? Will the 1 millions BTC will be lost forever?
  • No one knows the exact number of Bitcoins that have been lost forever, since there is no recovery function for wallets, and if you lose your private key, your Bitcoins stored your wallet are lost forever.
  • Summing it up: There will be less than - positively estimated - there will be only about 14-15 million bitcoins available in the next decade (that are not lost)
  • Just imagine what would happen if 10% of people living... let's say in Japan (population of about 130 million) or Russia (population of about 145million) want to own 1 Bitcoin each: There wouldn't be any left for the rest of the world
  • Do not forget the large investors/ rich people, buying and investing in Bitcoin: They are usually buying large amounts.
  • Only about 55% of the currently circulating Bitcoins have ever been used for payment/transaction
  • Every time a halving happens - every 4 years - the price of Bitcoin doubles within the next weeks and months
  • Bitcoin still has the largest market cap, and it is still the most popular cryptocurrency in the world, because it was the first cryptocurrency and also first to introduce the blockchain
  • Currently Bitcoin has a scaling problem and got pretty slow and with pricey fees on transactions. But there is the first solution (fork) already coming in August, and probably there will be even more to address this issue and make Bitcoin again more interesting for payments.
  • More and more shops around the world are accepting bitcoin, with the latest big news being that Japan will introduce Bitcoin to more than 100.000 shops.
  • As you can see here in the picture, every time Bitcoin reaches a new alltime high, especially in round thousand numbers like $1000, $2000 etc. it is all over mainstream media news and thus increasing the bitcoin price even more. The google search for Bitcoin and therefore the global interest in bitcoin is rising exponentially:

And as you can see, it's not only people in Western countries that are interested in bitcoins, but it's a global demand.

  • "The more countries get in financial uncertainty or bottleneck, and the more people lose trust in fiat currencies like dollar, euro, and the more hard cash is being completely eliminated, the more ...." you can end this sentence like yo, we don't want to put any theories out there, since this is not an opinion piece, however you can complete this sentence, if you have sources or studies backing up your claim.

Calculation:
We have used the recent numbers of http://money.visualcapitalist.com/all-of-the-worlds-money-and-markets-in-one-visualization/ that are pretty well visualizing the current "money order" of the world even - to our surprise - including bitcoin:

But the most important numbers for us are following :

Narrow money, means easy accessible money that is around the world, currently it is estimated to be around $28,6 TRILLION with a "T". For your information: 1000 million are 1 billion, and 1000 billion are 1 trillion.

We have generously rounded that number to $30 trillion, as it is easier to visualize and to calculate with.

A1) So, let's do the easy 1x1 math: If Bitcoin would actually aim to replace just 1% of that money, that would be (0.01*$30 trillion) $300 billion. As time of writing the article, BTC has a market cap of about $45 billion:
https://gyazo.com/9ff33a40c1af342d58f37eea11ffc03a

This would mean, that in order to achieve a market cap of $300 billion with let's say 17 million BTC (300/0.017), Bitcoin would need to have a price of about $17650 (17,65k).

A2) If Bitcoin would actually aim to replace 10% of our narrow money, that would be a whopping (0.1*$30 trillion) $3 trillion,
Bitcoin price would need to go to (3000/0.017) about $167500 (167,5k).

Now, we know that currently (because of the scaling problem), Bitcoin is mostly used as a financial investment and for trading, meaning used like a stock. So let's have a look at the current global stock market value: An unbelievable $70 trillion.

Let's say that

B1) Bitcoin is going to replace 1% of that market: (0.01*70 trillion) that would equal $700 billion. BTC price would have to reach (700/0.017) about $41000 (41k) to accomplish that.

B2) If Bitcoin would replace 10% of that market: (0.1*70 trillion), that would equal $7 trillion: BTC price would have to reach (7000/0.017) about $410000 (410k) to accomplish that.

Combining both markets:
As Bitcoin is used as a currency and as a financial commodity, we have to combine these both markets in all 4 scenarios:

Z1) A1+B1: In case of 1% replacement of both markets that would mean, Bitcoin would have to have a market cap of $300 billion + $700 billion = $1 trillion. This would result in a BTC price of (1000/0.017) of about $58500 (58,5k)

Z2) A2+B1: BTC replacing 10% of easy money and 1% of global stock market ($3 trillion + $700 billion): The price of a bitcoin have to be about (3700/0.017) $217650 (217,65k)

Z3) A1+B2: BTC replacing 1% of easy money and 10% of global stock market ($45billion +$7 trillion) : The price of one bitcoin coin would reach about 414400 (414,4k)

Last, but not least:
Z4) A2+B2: In this great scenario (the dollar would probably be about to collapse, thus forcing the U.S. to start a 3rd world war? :> ) 10% of both the circulating easy money and global stock markets would be replaced by Bitcoin. This would force Bitcoin to reach a market cap of ($3 trillion + $7 trillion) $10 trillion, requiring the price of 1 BTC to reach (10000/0.017) $588235 (588,2k). More than half a million for 1 precious BTC.

For all of you saying that any of these scenarios are highly unlikely: We would like to remind you of the global agenda to eliminate hard cash, meaning no paper money and no physical coins anymore (even India with most of its population being super-poor has announced it goal to eliminate hard cash in India) , thus forcing every citizen on this earth to do payments and money transactions online. It is happening with the European Union limiting hard cash payments to under €5000 and denmark totally getting rid of hard cash (only old people are paying in Denmark with hard cash) and finland and sweden are about to become like sweden, too. So even more people will be forced to online money, thus it is very likely for people to discover and adapt bitcoin and as we know from trends, numbers, and statistics, cryptocurrencies and also Bitcoin are growing exponentially. BOOM.

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Boom, that nails it. This is a pretty intense calculation btw and so far the most comprehensive and coherent I've seen.

Thank, you. Although the calculations were pretty easy, it took me about 3 hours to pull together all the info and facts needed for the complete picture.

No one liked this at the time but I compared bitcoin to some other currencies
https://steemit.com/bitcoin/@ender/usd1-000-000-bitcoin-prediction-in-context

Thank you, very interesting article, didn't seecthat one. Following you!

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