Is a Six Figure Bitcoin Possible?

The first thought that pops into every single person’s head when you mention $100k bitcoin is: “that seems way too high of a number, how could it possibly achieve that?” This is reasonable initial assumption and it may seem difficult to fathom because bitcoin is a very new, unprecedented technology However, once you start to understand the macroeconomy, modern monetary theory and how they impact the value of the currency and asset prices, it will begin to make sense.

Just recently, congress passed a new $900-billion-dollar stimulus. 24% of all US dollars in circulation were created in 2020 and with this second stimulus it is probably more likely around 26%. All the recent money printing and the speculation of continued money printing from Biden, has caused the dollar to weaken dramatically. The dollar, as I am writing this, sits around 89.60 points on the dollar index, which measures the strength of the dollar against a basket of foreign currencies. It hasn’t sunk this low in a long time, and it is likely to continue to take a dip lower. Unfortunately, this is precisely what congress and the Federal Reserve a trying to accomplish: a weak dollar. Sounds crazy right? It’s because it absolutely is!

The reason for this is there is no stop in sight for the money printing. Janet Yellen- Biden’s proposed secretary of the treasury- is one of the most liberal people to have ever held the seat (liberal in the sense of a lack of being fiscally “careful”). Janet Yellen, along with Jerome Powell the head of the federal reserve, will advocate for horrible and detrimental monetary policies. The dollar will be devalued so greatly, people will have no choice but to flood to inflation hedge assets like bitcoin.

We know that Janet Yellen and Biden will contribute greatly to the demise of the US, and rise of bitcoin, but there are also many other contributing factors for bitcoin. Bitcoin is slowly eating the financial worlds lunch. Gradually, then suddenly, the market cap of bitcoin is going up every day. Bitcoin, compared to Bonds ($100 trillion asset class), equity’s/stocks ($90 trillion), and gold ($10 trillion) is still a very small asset class. Meaning it has so much room to grow. Never look at bitcoin in terms of its price per unit, but rather how large the market cap is, which as of now is 420 billion (half the size of the current stimulus bill). A smaller market cap compared to other assets is a great sign. It means that we are still super early in this game. Bitcoin only needs to equal golds current market cap for each bitcoin to be worth 500k. In a digital native world is that so hard to believe? Bitcoin- which is gold 2.0 essentially but 100x better- can easily attain that over the next decade. Yet, that’s just another contributing factor for the growth of bitcoin.

Institutional money is pouring into bitcoin every day. Big investors like Stan Drunken Miller, Paul Tudor Jones, and plenty of other legends are embracing bitcoin. Calling it one of the best investments of their career. Institutional investment firms like Black Rock (handles 9 trillion dollars in assets), fidelity, Citi bank, etc. are also embracing bitcoin. Companies like MicroStrategy, which is listed on the Nasdaq, are allocating large sums of their balance sheet (available cash and assets) into bitcoin, nearly a billion dollars. No to mention a bunch of other companies also doing this to protect their wealth from a depleting dollar. But what does this mean for bitcoin. It means that soon bitcoin will be adopted by a vast majority of the finical world, making it one of the best investments to make. As mentioned, we are still so early and when institutions start to really pour into bitcoin there will be more money in bitcoin than ever before. Morgan Stanley just said the other day that institutions would add 600 billion dollars to bitcoin’s market cap within the next year, driving the price up astronomically in the meantime. If a mainly retail market has managed to propel bitcoin from 0$- $24,000 in the past decade (which makes it the best performing asset in the past decade by an insane percentage), I can’t imagine what institutions can do who have trillion of dollars to offer.

Furthermore, it is important to add on the that last point. People forget bitcoin was once $0, a worthless asset, which then over the course of a decade produced a 6,271,233% gain (not updated for the current price btw). So, imagine the people who said bitcoin could easily go to 10k, while others said the same thing they are saying now; “impossible, that could never happen”. Yet, in 2020 there is more of a reason to own bitcoin then ever in its existence. There has never been as much knowledge of its importance nor has its attractiveness ever been so discussed with a genuine attitude. Its also way easier for bitcoin to achieve a 100k price point than its prior tasks.

Finally, just because you are seeing new all-time highs every week, that doesn’t mean stop buying. Bitcoin over this next decade will continue to grow and grow, nothing will be able to stop it. Just imagine if bitcoin matched golds market cap, something that is completely tangible. It’s a no brainer, I really don’t even think that’s a big deal. Bitcoin will take money from all the assets, especially bonds as bonds are beginning to have no intrinsic value and are producing extremely small yields.

Bitcoin vs all other asset classes over this past decade. Bitcoin has been the best store of value whilst also exhibiting amazing number go up technology (aka the asymmetric properties; parabloic)

This chart shows the expansion of the money supply since the 1960s. Look at this year, 2020 has been the year of money printing. We literally had a straight move upwards, something that you really don’t want on a money supply chart. This chart should genuinely scare you. Millions of lives will be destroyed because of this.