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.
Image Source:
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
Makes sense. I've bought a couple of batches of Steem this week, using fiat and via Ether.
I think earlier on in the year all coins were rising together, but now we have, as you say, the trading between BTC and the rest.
The upcoming BTC fork is interesting too, perhaps people are looking for a repeat of the BCC payout with Bitcoin Gold.
A few more weeks to wait and Steem should be rising again... hopefully!
Where did you buy the steem using fiat?
Not sure if Bitcoin should just be held as a store of value or as a currency
Bought 21000 SP for 5 bitcoin a couple of days ago, which is the bad news :(
The good news is that I'm using the steem power to offer a delegation service, on a month to month basis.
I've leased out 2 of my 3, 10K SP lots already, at 2% per month.
It's an interesting development of the ecosystem.
I came to the same conclusion about the price, but read some hit pieces on btc gold, so underestimated fork fomo.
That's exactly right. This is why I'm hodling..
Speaking of bitcoin going up or down, most experts think that it is falling. Nobody dares to foresee the bottom which can reach BTC, but the majority is sure that bitcoin will conquer new heights this year.
The day is inevitable when you don’t talk about bitcoin and we only refer to bits and Satoshis...
At what price point might that be?
It's in the upper hundred thousands.
excelente informacion!!! como estaban diciendo y contando que unos de los capitalistas del bicoin comento en una entrevista que el bitcoin alcanzaria los 250.000$ para el 2022 asi que es bueno pode ir invirtiendo en la moneda ya que estamos en una parte donde el bitcoin esta bajo aun, aunque ya ha bajado hasta los 6.500$ estos ultimos tiempos hoy en dia estamos ya por los 8.000$ e vuelta asi que es bueno poder ir invirtiendo ya en lo que es la moneda virtual para poder generar ingreso!!! saludos
An excellent post !
This is closer than anyone thinks. I read or heard somewhere (I think a Trace Mayer interview) that 90% of Bitcoin is in the hands of 5% of wallets which are holding for the long-term. Also, the creator of Bitcoin Satoshi Nakamoto who's identity is unknown mined the first million BTC and has left it is the same wallet so that supply may never be available either. Therefore, the supply is even less than we expect.
Yes, I have read similar things. Could be as high as 25% less due to "lost" keys/coins...
*8k for 1 Bitcoin? Now that's astronomical! Will it ever come down low enough for the average Joe to get a hold of even just one.
I need to take up economics to figure out this conundrum!
conundrum indeed!
It does not really matter if you own a whole bitcoin. I believe you can buy very small fractions but you get same percentage gains or losses as somebody holding 1 bitcoin or 100 bitcoins
Oh, I see. Thanx for the explanation...much appreciated.
So, let the millionaires enter the market! I do believe that a stock exchange crash can push them to the crypto market. I would give them a warm welcome and good investment tips. Namely the coins in my portfolio :)
Thanks to give us some more faith!
Maybe you could give me some tips about the coins to go for
The next coins are having the biggest share in my portfolio, which you can follow on my blog, are Neo, Stratis and Neblio!
But do your own research because I am not a wintered crypto investor, I would not even follow my own advice blindly!
But did you then re-buy at 6k and make up for it?
Demand will increase as more and more people realise that blockchain technology is the way of the future. Once major industries realise this and start accepting cryto as a means of payment then demand will soar and prices will go through the roof.
Awesome post cheers
It’s not just individuals, the big thing for me is the institutional money that will boost demand for bitcoin. Funds are going to want to start to allocate a portion of their portfolio to crypto and Bitcoin will be a huge percentage of that.
In my opinion, we haven’t even seen close to the potential demand for bitcoin that we will. It’s certainly exciting to analyse and be a part of! 🤓
How do you think rising rates will affect bonds and equities? It looks like 10yr rates hitting 3 are taking their toll on equities, and equities are stuck range bound despite really good earnings so far.
Well the textbook says that rising rates should hit equities. But we’ve known that rates are going to be (and have been) rising for ages now and equaities continue to show nothing but strength.
Who knows man 😂.
Very interesting perspective and a positive way to think about BTC. Not subject to normal and typical supply and demand curves and behavior. Since supply is constrained. VERY VERY interesting way to think about potential future price points
Luar biasa postingan anda sangat bagus .saya sangat menyukainya.
If you are a hodler, you will be shocked to find out how high the BTC price will be by 2020...
In future common people will not afford to buy BTC due to it’s high price. They will be able to buy only Satoshi. Thanks for sharing such good informative post.
I am not quite sure if I understood the base of this logic...
Luar biasa postingan anda kerrn abiss dan bermamfaat bagi semua steemians
The demand will increase soon
nice post, bitcoin is one part of everything but the real Altcoin will grow just as big as Bitcoin. Not all of these scams
As part of the cryptocurrency world, Blockbasis is a platform where users can send and receive Bitcoin with an email. We strongly believe that Bitcoin and other cryptocurrencies have a bright future ahead. It is only a matter of time until we see how the market changes for the better. Blockchain and cryptocurrency is starting to gain more and more traction, and it looks more and more certain that it will play a large part of our daily lives.