Stop The Bitcoin Bubble Nonsense: Bitcoin Will See A Trillion Dollar Market Cap Over The Next Few Years: It Is The Winner

I need to thank @transisto for sending me the post from Reddit which is the basis of this post.

Financial people like to talk about bubbles especially when discussing Bitcoin. "Is Bitcoin a bubble" is the question asked on every segment on CNBC that deals with this issue. Of course, all the financial "gurus" start espousing their ideas while pulling out their charts. They talk about what they see based upon what they dealt with in the past while ignoring one major aspect which I will mention in a minute. The reason these guys are so far off is they have no clue about the technology. They like to throw a few buzz words out there to make people think they know what they are talking about, but they really do not.

The truth is Bitcoin is like nothing you have ever seen before. To try and compare this to stocks or commodities is a mistake. It is impossible to value it in the same way you do those assets. Cryptocurrencies are going to take over the world. In 10 years, almost everything will be tokenized. The technology people understand that, most of the financial people do not. This led me to write this post the other day:

https://steemit.com/bitcoin/@taskmaster4450/the-truth-about-bitcoin-and-why-the-financial-people-have-no-idea-about-it-and-no-it-inst-going-away-usd100k-easily

Which brings me to the article that @transisto sent to me. Here was a poster who understands the technology yet while also grasping Wall Street. I do not know if he works in the industry or not, but he sure knows what he is talking about. It appears he is one of the few who can understand both sides of things.

In my article I wrote about the cycle that happens when a blockchain is developed. To quickly reiterate, developers start producing stuff on a blockchain which attracts the attention of speculators/entrepreneurs who drive the price of a coin up, drawing attention to it. This, in turn, pulls in more entrepreneurs/developers who fund/create more stuff that gets more speculation going. This continues and is the reason Bitcoin is far ahead of everyone else in terms of the developers working on it.

Now, to quote the article:

It works like this: There's trillions of dolalrs poised to enter cryptos over the next few years. The vast majority of this money values market size/liquidity over all else, and so will naturally gravitate to the biggest/most liquid market (BTC). In turn, the very act of all this money flowing into BTC will make BTC even BIGGER and more liquid then it's competitors. In turn, this makes BTC even MORE attractive to the next round of money coming in, which means it gets bigger and eve more liquid still. Which in turn makes it even MORE attractive.....etc etc....

To start, there are TRILLIONS of dollars poised to enter the crypto market over the next few years. Do you understand what that means? The entire crypto space is roughly $170B at the moment. There is going to be 10-20 times the entire market cap flowing in over the next 36 months. This space will be $2T-3TT by the end of 2020.

Secondly, did you see what he did there? He just described the same cycle but from the financial/Wall Street perspective. Since Bitcoin has the most developers, started before everyone else, and has the most name recognition, it will get the lion's share of those trillions of dollars. Big money people like the size which bring the liquidity they require. Bitcoin delivers this.

He adds:

The growth of Bitcoin up until now has been overwhelmingly been powered by crypto-tech geeks (the hobbyists, the coders, the anarcho capitalists, the ideologists etc). For these people, the underlying technology has been what's most important to them. For them, things like block size and scalability are of the utmost importance. These people often think that Bitcoin is going to replace fiat currency, or replace the entire global financial system (it isn't. It's going to become a significant part OF the global financial system, but to think it will replace it is extremely naive and amateurish thinking that massively underestimates the enourmous complexity of the financial system, as well as the huge amount of inertia built into it). These are the people who brought Bitcoin from a weirdo techie project to a major $100 billion market. That's an impressive achievement, but that phase of Bitcoins growth is now coming to an end. We are now entering the next phase, where the primary drivers of growth will not be tech people, but finance people. The Big Boys. The institutional dollars that move all major markets (whether it be stocks, bonds, fx, commodities etc); the hedge funds, the pension funds, the mutual funds, ETF's, high net worth individuals etc. We're still in the very beginning stages of this second phase. Bitcoin is still too risky for most of this money (which is inherently conservative), but the more risk adverse members of this group (mostly the higher risk hedge funds and risk taking HNW individuals) are just now starting to dip their toes in. As the market becomes bigger and more liquid, the volatility will greatly go down and the percieved risk will go down as well, and eventually the more risk averse members of this group will take the plunge. That will take several years probably. The problem for the first group (the tech centric folks) is the finance boys have way, way, way more money then them, and it's THEIR money that's going to guide the development of Bitcoin. Everything follows price eventually, from miners to devs, to investments to infrastructure. And so unfortunately for the cryptoanarchists who thought that Bitcoin was going to bring down the System, it will be the System that determines what Bitcoin will be.

While I do not agree with his outlook of tech people, he is right about the process. He basically said there is no bubble simply because we are only at the beginning stage of the real money coming in. How can something be a bubble when it has a total value of $170M compared to a trillion or two entering over the next few years? It is absolutely impossible.

People like to look at the charts between Bitcoin and the NASDAQ during the dotcom years. There is no comparison. As was just stated, the money has not even shown up yet. Will Wall Street create a bubble in Bitcoin? Of course, that is what Wall Street does. However, for them to do that, they need to be involved. At this point, they are not.

Does this mean Bitcoin will go straight up without any pullbacks? Of course not. Could Bitcoin drop 20% or 30%? Sure, this is fairly common for Bitcoin. We are still in the stage where volatility is high. That said, there is no doubt that Bitcoin, when the Street's money shows up, it will take off.

The developers are key. I stated this in my article. Bitcoin has more developers working on it than any other blockchain. What do you think happens when a trillion dollars is dumped into Bitcoin? Do you think more developers will follow? I think they will be coming out in droves. And do you know what this means? It means that most of the technological challenges which lay ahead of the bitcoin blockchain will be solved. It also shows that after Wall Street bubbles it, there will be a substantial network to fall back upon which will have huge applications and uses going forward.

This is how things usually work in the strange marriage between tech and finance.

And that marriage is the reason why Bitcoin will see a trillion dollar market cap....the finance people deem it so.

For the entire post:

https://www.reddit.com/r/BitcoinMarkets/comments/77twjx/why_the_debate_about_blocksize_is_irrelevent_and/?st=j93fo9l0&sh=e1cd4c90

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