Bitcoin’s Long Term Value

An Adoption S-Curve for a New Monetary Technology

This is not investment advice. Bitcoin is highly volatile. Past performance of back-tested models is no assurance of future performance. Only invest what you can afford to lose. You must decide how much of your investment capital you are willing to risk with Bitcoin. No warranties are expressed or implied.

Figure 1: Technology adoption curves for some major inventions. Bitcoin is 12 years old and has 11% adoption in the US.

Technology S-Curves

It is well known that technology adoption approximates an S-Curve or logistic function. It took half a century for electricity to be widely adopted in the US, a quarter of a century for half the population to get TVs, but mobile phone adoption took only half that time.

Bitcoin is still in its early adopter phase. This article estimates 11% of the population in the US own Bitcoin https://www.bitcoinmarketjournal.com/how-many-people-use-bitcoin/.

Bitcoin recently reached $1 trillion in market cap for the first time, but that is just a fraction of gold’s $10 trillion market cap. Bitcoin is often referred to as digital gold. Of course, gold has taken thousands of years to reach its present market cap.

It would be interesting to know if Bitcoin will reach gold’s total value ($10 trillion) or even exceed that level and begin to challenge the market cap of US…