Worried about the price of Bitcoin not going up? Something to think about...
Something I came across today should help put your mind at ease and also help put the bitcoin supply/demand dynamics into perspective.
While bitcoin has had major issues mounting any kind of a bullish run so far in 2018, that doesn't mean it can't, or that it won't.
To fully understand what I mean by that, think about the economics and the supply/demand structure that surrounds bitcoin.
There are currently roughly 17 million bitcoins in existence (actually much less than that as some are said to be lost forever due to lost keys).
Each coin is currently valued around $8k.
Do you not think there are more than 17 million people in the world that could afford to buy 1 whole bitcoin at the current price?
Interesting, how many people out there could afford to do that?
While there are many out there that could make that purchase or purchase more than 1 coin, lets take a look at the number of millionaires on the planet to get some numbers on paper.
For some extrapolation, take a look at Credit Suisse's numbers, they say there will be roughly 54 million millionaires by 2019.
(Source: https://www.cnbc.com/2015/06/24/how-many-millionaires-in-the-world-it-depends.html)
Which means there would be ample investors out there with adequate resources to make something like that happen.
Now, if that were to happen, that would more than lock up the entire available float and corner the entire bitcoin market.
The end result would be a non linear price reaction.
(Source: https://keydifferences.com/difference-between-demand-and-supply.html)
Cool, but what is the point?
The above brings me to my main point, yes bitcoin has had a rough go so far, however, the limited supply is one of it's strongest selling points.
Well besides it's decentralized nature as well as it's non-correlation to any other asset class.
Bitcoin isn't really subject to changes in supply, instead it is subject to changes in demand. Which means that if there was ever an event that made bitcoin demanded by just about everyone, the price could soar to massive heights.
The fact that the mining reward is halving in 2020 is part of the reason McAfee is so bullish over the next few years as well. The supply gets even more constrained.
Which means...
If demand increases even slightly, prices go a lot higher.
If demand increases significantly, prices go astronomically higher.
Stay informed my friends.
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Follow me: @jrcornel
Being that is has a capped supply, eventually demand will surpass supply. So no real reason to fret about current prices.
Good point
Thanks
Great Economic’s lesson. Keep up the good work Professor 👨🏫
yeah good article! I believe the spring of cryptocurrency is approaching!
An interesting perspective. You could also make the argument when playing devils advocate that the 54 million millionaires are smart and wouldn't need to buy the bitcoin for $8k a piece if they didn't believe it was valuable. Say there are 17 million of a specific car that are only $8k, do you buy it because there will only be 17 million ever. What if they produce more of that similar car? Not a perfect example, but just because someone is a millionaire and there is a limited supply of something, doesn't mean they will necessarily buy it.
Yup, plus, a decrease in demand would also mean a decrase in price.
It's good to read from multiple sources and analise them criticaly, for example, @jrcornel is pretty bullish on BTC at all times, wich isn't bad, but it's a thing you should keep in mind,
Also, well said!
It will go up eventually! WAY up!!
I guess McAfee might win his weird bet about BTC price...
Ha, we are a long ways from that, though it's not impossible.
ditto, i truly think, demand is going massively outpace supply in the near future. we may be looking at $1 million btc before 2020. those laughing at mcafee now will be the ones sulking. watch this talk from tom lee of fundstrat. talks about the same point you made and is quite incredible -
Interesting video thanks for posting it! I didn't think I would watch the whole thing with it being over 20min ...but then I found myself at the end. One thing non crypto related that surprised me was that 44% of RV buyers are millennials.
Yes, its a hipster thing I guess. I heard the same thing from someone else, the RV market has been given a new boost by hipsters, mostly millenials.
Thanks for the comment.
Makes Sense , I think the prices will go down more as two simultaneous forks are coming ,
The Whales will try to P& D some coins , So don't step on the Fomo Train ,
I would suggest to wait near the fork , Let the coin you are interested in Buying
find some support and then Buy + Always Use stop Loss ,
I have learned this lesson the Hard Way ! Great Post ! Followed .
Which two forks are you referring to?
I wish i could understand what you are saying better.
Don't worry my dear friend @jcornel.. cool down !!!
Just wait and see at the end of the year...what happen...!!!
interesting point of view. this calculation make me think that bitcoin could easily be worth 1 million dollars