What’s going to send Bitcoin to 100k and Beyond
You shouldn’t be buying Bitcoin as an inflation hedge. Not that Bitcoin can’t serve as one, but because there’s an even more compelling reason to hold Bitcoin.
There are assets with better and more weathered track records as inflation hedges. Stocks, real estate, and yes even gold serve as equally compelling vehicles to protect against inflation. You’re simply short-changing Bitcoin by lumping it into this category in which it fails to stand out.
Bitcoin’s most natural use is in a category in which it is peerless. It is the only truly trustless, uncensorable and unconfiscatable asset.
Bill Gates and Warren Buffett have said that they don’t ‘get’ Bitcoin. Is it any wonder why? These are rich, white men in a country that’s a paradise for rich, white men.
How about other wealthy people outside of the United States? How about Jack Ma? When Jack Ma was on state-mandated ‘vacation’ for his off-the-cuff remarks suggesting reforms of the Chinese financial system, I wonder if he thought about buying Bitcoin. Do you think Jack Ma needs to be explained the benefits of a trustless, uncensorable and unconfiscatable asset? (What are Jack Ma’s alternatives from protecting his assets against the government? $1B of gold? $1B of real estate in the US? What does that look like? There is simply nothing easier or more certain than Bitcoin for this purpose.)
Here’s a crazy idea… wouldn’t he be stupid if he wasn’t considering buying Bitcoin (assuming he doesn’t already own thousands of BTC)?
How about all the other billionaires and millionaires in China, Russia, India, the Middle East, Africa or South America? Just how many people are we talking about that have legitimate concerns over the safety of their assets?
What carried the Bitcoin price from $0 to $30k was retail investors like you and me. From $30k to $50k it was corporates and institutional speculators. But what’s going to carry the Bitcoin price from here to $100k and beyond are going to be these ultra-high net worth individuals who are protecting their wealth from government persecution and war.
Here’s the real kicker. These high net worth individuals don’t want to speculate in Bitcoin. They don’t necessarily care to turn their $1B into $2B. They just want to protect what they have. That means they will buy at any price… In fact they would prefer to buy at a higher price than a lower one.
These types of investors prefer liquidity over appreciation. When the global market cap was $50B, Jack Ma wouldn’t easily be able to commit $1B into Bitcoin especially when Bitcoin liquidity is fragmented among many individual exchanges. Now that Bitcoin is $1T market cap, these types of investments become possible with the promise of easy exit liquidity if needed. Yes, these types of investors would prefer to buy more when the price goes up. Name another asset in which this dynamic exists… Rolexes?
The market cap that Bitcoin enjoys today is a critical trigger point that would induce a whole new group of wealthy investors to invest in volume, at ever higher prices, not because they want to but because they have to. HODL on.