An article that explains in the simplest and shortest way why Bitcoin’s price growth to a million dollars is imminent — which is why you should buy and hold (invest).
Introduction:
Bitcoin is a commodity that is well suited to be used as a form of money because it has the following properties: durable (not easily destroyed), divisible (small units available), transactable (easily transactable), fungible (where parts are indistinguishable from other parts), portable (easily moved), and scarce (limited supply).
Bitcoin’s scarcity is increasing overtime due to the halving (production rate gets cut in half every 4 years), difficulty adjustment (production cost trends the price strongly), and growing decentralization (more people interested in having control of their own money). And we know that only 21M Bitcoins will ever be created.
The price of Bitcoin is sure to at least double every 4 years when the halving (the production rate gets cut in half) occurs because:
“The price of any commodity tends to gravitate toward the production cost. If the price is below cost, then production slows down. If the price is above cost, profit can be made by generating and selling more. At the same time, the increased production would increase the difficulty, pushing the cost of generating towards the price.” — Satoshi Nakamoto
Once you understand this simple thing about commodities, it is very simple to invest. Buy in the production cost and you are guaranteed positive returns in the long term.
To prove how true this is, we can look at the prices and production cost of commodities:
Gold’s most traded prices in 2015–2020: $1,050-$1,400 | Production cost: $1,000.
Silver’s most traded prices in 2015–2020: $13–21 | Production cost: $10.
Bitcoin’s most traded prices in 2017–2020: $6400-$8200 | Average production cost: $6,850 ($4400-$8000).
Seeing the trend here?
And now, here is the kicker: Bitcoin’s estimated production cost after the 2020 May halving: $12,525-$13,700.
The quote above from Satoshi (the unknown creator of Bitcoin) explains very well why commodities and specifically Bitcoin’s price will always be around the production cost, and as you just read — the markets prove that.
After the halving, when the price reaches $12k-14k, this will be the new bottom (which will increase overtime until the next halving because price and mining network growth).
Then from there the price will continue to increase because reaching those prices again (this is a whole other topic to talk about) and we will get another parabolic bubble from institutions and retail which will push us over $20k to anywhere between $60k and higher.
These prices are only a matter of time, because as explained in the start — Bitcoin is currently the best money in the world, and slowy but surely, everyone will want in, and every halving will half the production cost which will cause a new parabolic cycle, which will eventually will push a single unit of Bitcoin to a multi-million dollar price.
This will probably lead to Bitcoin becoming the new world’s reserve currency — replacing the United States Dollar, but this is likely still years away from us.
“Bitcoin will become multi million dollars per unit. And guess what, I have many units.” — Tbjbu2
“I know I’m right, but even if it’s possible I’m not, it will be foolish to not bet on it.” — Tbjbu2
“The minimum target after halving 3 is $60,000. There is no lower target. All research points at a huge bull run every halving. It is inaccurate to say it won’t happen, and there is nothing I can think of that will cause it to fail.” — Tbjbu2
Tweet/DM me at https://twitter.com/Tbjboo for questions or just to talk about Bitcoin!
How To Take Action
If you are ready to take action and want to take advantage of this, here is what you have to do:
1. Understand that this is a long term investment. Treat it like a long term stock investment.
2. There is much to learn. Go to Bitcoin.org to continue down the rabbit hole.
3. Once you understand what you are getting into, google ‘Buy Bitcoin’ and start stacking sats! (The best prices to buy in are production cost levels, but over multiple years you should be in profit no matter what price you buy in)
4. Once the price starts going up, your only focus should be to figure out exactly what needs to happen for you to cash out. Because if you don’t cash out (sell your Bitcoin to USD) your investment will pop with the bubble and you will have to wait 3~ years to see the the all time high prices again.
Extra Section For Targets And Time Of Targets
How many years would it take for Bitcoin to reach $1,000,000?
We can’t really know, but based on the gains from the previous 2 halvings it will take 16 years.
Halving 3 (2020) should take us to $80,000, a 1000% gain from here.
The multi million dollar target of $10,000,000 would happen if the Bitcoin becomes the world’s reserve currency and the USD goes to zero. We can’t really know if it will happen or how long it would take, but it’s likely to happen at some point I think.
