Since 2020, an epidemic that has not occurred in decades is rapidly striking the world. The new crown epidemic has shaken the traditional world’s firm beliefs. Major economic powers have been forced to shut down their respective economies to stop the spread of the epidemic.
Central banks around the world are stepping in to support economies hit by the largest recession since World War II. More than $12 trillion is being printed and pumped into the monetary and financial system.
Preserve the current system at all costs
Richard Nixon’s event of ending the gold standard and setting up the current global monetary system in 1971 was iconic.
Whatever measures are taken, the results will be borne by the majority of ordinary people. Meanwhile, the wealth of the super-rich will continue to grow throughout 2020. Today, Jeff Bezos, the richest man in the world, has a fortune of more than $200 billion. In modern times, it is unprecedented for one person to have such a huge amount of wealth.
In the face of this, we are faced with an alarming situation of an overheated monetary and financial system. In the last four years, global debt has become parabolic and will reach $277 trillion by the end of 2020. In the last twelve months, more than 25% of the volume of dollars in circulation has been printed.
Bitcoin may be the best weapon against inflation
Inflation is making a comeback, and sooner or later the stock market will eventually see the current bubble burst. Once again, this is no different than what some people want to believe. Bitcoin has emerged as the best store of value for the future in the face of monetary inflation triggered by central bank monetary policies and stimulus programs enacted by the governments of the world’s major economies. In a world where everything will be digital, Bitcoin will play a key role in the future. Its asset properties will make a difference, and more and more people will buy it. The fact that Bitcoin’s planned monetary policy does not depend on any decision by a few people, and that there is a hard supply of 21 million units, is clearly attractive. Bitcoin is the antithesis of the current system.
What price can Bitcoin reach in the future?
More and more people are realizing the fact of Bitcoin’s incredible power, and its price has surged since October 2020 to nearly $65,000 in mid-April 2021. Its price has since retreated slightly to about $58,000. Bitcoin seems set to remain in the necessary consolidation phase for some time, and most investors are wondering how far Bitcoin’s price gains can go in the future. After all, when Bitcoin was first listed in U.S. dollars in August 2010, it was priced at just a few cents. In just a decade, its price has risen a whopping + 80,000,000%, which is surprising. For those who are still reluctant to take control of the fruits of their labor by buying bitcoin, I will present 4 future price possibilities for bitcoin.
Scenario 1: Bitcoin is a bubble. Bitcoin detractors always say it’s a bubble. Some call Bitcoin a Ponzi scheme. Others explain that bitcoin is only used by people who want to launder money. Many economists who oppose Bitcoin cite the Tulip Mania as an example. Tulip Mania is the name given to the sudden tulip craze in the seven northern republics of the United Netherlands in the mid-17th century. Beginning in 1636, the price of tulips rose excessively, followed by a plunge in the price of tulip bulbs. What is commonly known in economic history as the Tulip Crisis occurred in mid-1637. At the height of the “tulip mania” in February 1637, promises to sell tulip bulbs were negotiated for an amount equal to ten times the annual salary of a skilled craftsman:
Tulip Price Index 1936-37
These bitcoin opponents, believe that the bitcoin story will end like the tulip story in Wikipedia. These opponents seem to forget that the tulip mania only lasted for 18 months. As a reminder, the price of bitcoin has been steadily rising for the past twelve years. For me, case 1 is clearly not valid. We’ll never see bitcoin go this way again. If a bubble can form in the Bitcoin world, it can only go up once, as we saw in late 2017. Speculative bubbles will eventually burst, but bitcoin always rises more after each crash like the phoenix. This will continue in the future.
Scenario 2: Bitcoin becomes an Internet asset, but only for technology enthusiasts If Bitcoin is a monetary revolution, it’s also a technology revolution. Bitcoin was the first successful implementation of a P2P currency. Satoshi Nakamoto’s invention accomplished a feat that many thought was impossible. In a digital world where everything is possible, Bitcoin has the potential to become the wealth of the Internet. In the second scenario, Bitcoin would remain in the $100,000 to $300,000 price range, but would be used primarily by a tech-savvy audience. Due to its complexity, the general public will never be able to use this digital currency. Efforts to democratize Bitcoin through an improved user experience will prove crucial here in the coming years. Of course, this scenario is possible, but I think it’s hard to see how this NgU technology will keep the public inactive if Bitcoin continues to rise to $100,000 by the end of this year. It is the perfect marketing tool for Bitcoin to capture the public’s attention. In addition, the upcoming rise of Central Bank Digital Currency (CBDC) will allow governments themselves to educate their citizens on digital currency. These CBDCs will be a kind of Trojan horse that will then promote Bitcoin. Once educated on the use of digital currency, citizens may sooner or later switch to the alternative method that best serves their interests. This is, of course, Bitcoin. As a result, Bitcoin will eventually overtake technology.
Scenario 3: Bitcoin replaces gold as the general public’s store of reference value. In the summer of 2020, gold breaks the record of $2,000 per ounce, then the follow-up since then has been less favorable, with its price remaining stable between $1,700 and $1,800. Meanwhile, the price of bitcoin has really skyrocketed. More and more institutional investors and large companies have turned to bitcoin in the face of huge monetary inflation. Bitcoin is the 2.0 version of gold, which has only advantages in a world where everything is digital. in February 2021, Bitcoin’s market capitalization exceeded $1 trillion for the first time. This has led many bitcoin opponents to realize that bitcoin will likely reach the market cap of gold in the future, which is 10 times the current market cap of bitcoin, as at the time of this writing, gold’s market cap is $10 trillion. As Bitcoin becomes more widely recognized as the best store of value available to the general public, it is increasingly likely that Bitcoin’s market cap will approach that of gold in the future. For many, it was the advent of bitcoin that interrupted the rise in gold prices since the time of the epidemic. In my opinion, by replacing gold as the preferred store of value for the general public, bitcoin will be able to be priced between $300,000 and $1 million. For me, this scenario is very likely. This is certainly a certainty for me, but everything leads me to believe that this will happen in the next few years.
Scenario 4: Bitcoin becomes a global reserve currency If Bitcoin surpasses the market value of gold, then everything will be possible in the future. The U.S. dollar is a weak currency that has been getting a lot of attention from America’s rivals, namely China and Russia. With the dollar as the world’s reserve currency, China will never be able to become the world’s first superpower. The currency gives the Americans great privileges. In addition, the entire monetary and financial system is in the hands of the United States. It is no accident that other countries are trying to develop electronic currencies for the future. But if the battle for digital currency is about to be fought, Bitcoin has already won the war. Although Christine Lagarde, the president of the European Central Bank, thinks Europeans will expect to use a euro digital currency, people don’t want such a tool. The digital currency will be very difficult to use as a world reserve currency, so it is expected to gain ground on the rise of Bitcoin. Bitcoin is apolitical and neutral hard money. It belongs to everyone, which will allow all countries to compete equally in the global system. In this scenario, the price of bitcoin will rise dramatically. It’s no longer utopian to see its price rise above $10 million. We may be entering the age of the Bitcoin Standard in the future. Using satoshi as a unit of settlement will become the norm and the lightning network will be widely adopted by the masses. This mass adoption will make it possible to use bitcoin for everyday payments around the world.
Of the four possible bitcoin price scenarios outlined above, the first one has been ruled out. Bitcoin is not a bubble. The people who keep telling you that Bitcoin is a bubble are lying. Scenario two has already happened, with Bitcoin’s price at $58K, and it is already seen by many tech enthusiasts as the ideal internet currency. Nonetheless, Bitcoin’s role as the best hedge in the face of the inflation we are experiencing has made people think far beyond the world of technology enthusiasts. More and more people are realizing that Bitcoin is likely to become the store of value of the future. There is no doubt that Bitcoin will eventually surpass the market value of gold in the next decade. There aren’t any guarantees as there have been in the past, but that’s my feeling to validate scenario three. For scenario four, it’s hard to say. The possibility still exists, but it depends on world geopolitics. So I won’t risk commenting.
Inflation is making a comeback and sooner or later the stock market will eventually see the current bubble burst. Once again, this is no different than what some people want to believe. Bitcoin has emerged as the best store of value for the future in the face of monetary inflation triggered by central bank monetary policy and stimulus programs enacted by the governments of the world’s major economies. In a world where everything will be digital, Bitcoin will play a key role in the future. Its asset properties will make a difference, and more and more people will buy it. The fact that Bitcoin’s planned monetary policy does not depend on any decision by a few people, and that there is a hard supply of 21 million units, is clearly attractive. Bitcoin is the antithesis of the current system.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/analysis-4-possibilities-for-the-future-of-bitcoin-prices/
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