The reason I’m posting here is because I have been following bitcoin for nearly 10 yrs investing here and there etc but was pretty surprised to come on this subreddit and see the almost obsessive, fanatical btc following ( I don’t mean to offend but this is the impression I get from some of the comments I’ve seen) with wild estimates of $10million per btc and would love to hear some of the reasons for much higher estimates and who knows maybe even change someone else perspective lol. I am going to do the classic: I am not a financial advisor, I have no idea if bitcoin will go up or down or what price it may or may not reach, this post is pure speculation and should be treated as such.
I can see a really strong argument for bitcoin hitting the $450k mark - but not much further.
Let me explain:
I believe Bitcoin to be much more comparable to gold than to any liquid currency that could legitimately be spent - one major reason is due to the speed of the transactions.
While the speed of a bitcoin transaction is really fantastic when compared to gold (I can send a bitcoin from UK -> US in like an hour, a flight to get a bar of golf there would take much longer and be much more expensive).
However when compared to using a fiat currency it is agonizingly slow, and I believe that it is destined to slow down as adoption picks up. This is quite obviously much much less practical than the current system, if I want to buy a bottle of milk I don’t want to have to stand in Sainsbury’s (Walmart to you Americans) for a few hours lol.
I am making this point purely from a usability perspective - let’s not get bogged down in the evil of the central bankers here!
So back to the original point, assuming that we have come to the conclusion that Bitcoin is much more like gold than any practical currency.
The market cap of gold is approx. $8 trillion (8,000,000,000,000) At the time of writing the cost of 1btc is ~$17,000 with the market cap at ~$317bil (~$317,000,000,000).
If we were to assume that bitcoin was to completely replace gold and become worth $8trillion. This seems unlikely to me so this would be a generous estimate, I would expect investors to diversify rather than completely switch holdings, so would probably dilute the gold market.
8000/317 * 17000 = 429,000
-> (goldMarketCap/btcMarketCap) * btcCurrPrice = finalEstimate
Of course this is a rough and fairly generous estimate so the real value I would personally be expecting would certainly be a fair bit lower than this.
Please note this is not to say that I don’t think there aren’t crypto’s out there that couldn’t perform the function of currency and I have almost no doubt that crypto’s will replace paper cash in the future (although not necessarily replace current online payment systems entirely) but I currently don’t see it happening with btc
Would love to hear some opinions on this estimate and I’m sure there are plenty available!
Edit: As I said speed of transactions is only one thing holding me back from the idea of bitcoin a contender as the ultimate global currency and in fairness Lightning network is on the way so there’s that...
Here’s a couple more questions/points which I feel no one has supplied me with a good enough answer to:
1) There are various ways that btc leave circulation e.g. someone dying and access being lost to their account. One that worries me much more is that dust accumulation in various abandoned wallets. Although less coins in circulation will lead to higher value per coin, ultimately the network can’t function properly if there are not enough Satoshi left in existence and dust will gradually (vary gradually) whittle away at the available amount forever - until this point is reached - what’s the soln here? Surely it would just be better to use a coin with an extremely moderate amount of minting every year forever to make up for lost dust?
2) people have to handle their private keys with no safety net - or at least handle their own wallets. Forgetting the password, losing the piece of paper with your seed or having a gun pointed at your head with a demand to transfer your life savings seems like a real issue to me. Sure you could allow an exchange or third party to handle your funds but this would somewhat be like using a bank, which is kind of defeating the point no? The major benefit of banks and financial institutions imo is that they essentially guarantee your money even in an event you get scammed or robbed, they will replace it. Would love to hear some responses to this particularly.
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