Since Bitcoin is already the most powerful “deposit tool”, people do not need to use other assets to maintain and increase their wealth.
Original title: ” Why is a Bitcoin worth $18,000? 》
Written by: Joe Burnett, Mimesis Capital Research Analyst Compiler: Stacey Lee
$330,000,000,000 (US$330 billion)
Yes, this number is the current value of all bitcoins in the world.
In the early days of 2009, Bitcoin was just born. But today, the total number of bitcoins has reached 18 million, and one is worth nearly 20,000 US dollars (18.5 million x 18,000 = 330 billion US dollars in total value).
Why is Bitcoin so valuable? Who are buying these “digital currencies”? More importantly, who do not want to sell it?
Bitcoin is a special asset
At the time of writing this article, the price of a Bitcoin is approximately $18,000. However, everyone thinks that its value is different: some people think it is worthless, some people think it is almost worth 18,000 dollars, and some people think that a bitcoin can be worth more than ten million dollars!
According to subjective value theory, the value of anything is calculated based on how much the buyer is willing to pay. Everyone can buy and sell Bitcoin at all times.
So the question is: why do some people take Bitcoin so high? In addition, how did Bitcoin become one of the best performing assets in the past 2 years, 5 years, and 10 years?
Michael Saylor, an MIT alumnus and founder/CEO of MicroStrategy (a billion-dollar listed technology company) said, “Bitcoin can collect all the currency energy in the world. Because as long as you store it in a safe It doesn’t need electricity, it can be stored permanently, and it can be quickly transferred to anyone!”
Some people think that Bitcoin is money, some people think that Bitcoin is digital gold, and some people think that Bitcoin is money. But in fact, no analogy is so precise.
Because Bitcoin is Bitcoin. Its uniqueness makes it different from anything else.
These characteristics make Bitcoin the most powerful “deposit tool”, not one of them. You can use it to store your future wealth.
It is very different from gold, dollars, euros, stocks or bonds. These are far inferior to Bitcoin due to the following points:
- The rarity of Bitcoin. When the market price of gold or traditional legal tender becomes higher, people will only mine more gold or print more banknotes. However, the number of Bitcoins is limited.
- Bitcoin does not require buyers to trust any person or institution. Traditional legal tender requires people to trust the government and banks. But in the past, these institutions are not so trustworthy.
- As for stocks, investors must believe that executives can grow the company’s cash flow faster than currency inflation.
- Bonds also require investors to trust the government or central bank of the country where they are issued. In addition, investors should expect that they will not depreciate when they get their principal back.
$18000 — The Bitcoin era is about to begin
Like all free market prices, the price of Bitcoin is a signal:
When the price of Bitcoin continues to grow and it can store all the currency energy in the world without losing it over time, why would anyone store their wealth in other over-financed assets?
Since Bitcoin is already the most powerful “deposit tool”, people do not need to use other assets to maintain and increase their wealth.
Now, more and more people are beginning to understand why Bitcoin has a future. This also explains why the price of Bitcoin has been soaring recently.
$18000 is just the beginning of Bitcoin.
Since Bitcoin is the most powerful “deposit tool”, it will not have a price cap. Therefore, when Bitcoin is fully adopted by the world, it will remain the most powerful “deposit tool”.
The value of Bitcoin in the future is unpredictable.
Even the most bullish investment bank price forecasts are likely to be orders of magnitude wrong.
Source link: mimesiscapital.medium.com
