Why It’s Not Too Late To Buy Bitcoin

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Why It’s Not Too Late To Buy Bitcoin

Many investors who have been watching the price climb significantly since then from the sidelines have admitted to me that they believe they now regret missing the chance to purchase Bitcoin I disagree with this opinion and I’m going to explain to you why.

The Growth Potential of Bitcoin

First off, Bitcoin is currently worth somewhere over $1 trillion. This is computed by multiplying the current price by the entire amount of circulating supply. The number of Bitcoins in circulation is 19,1 million, and the protocol has a hard cap of a maximum of 21 million coins. In my opinion, Bitcoin has established itself as a really decentralised digital asset store over the course of the past 12 years since its creation.

Bitcoin is frequently compared with gold, which has been used for 4000 years as a global store of value. Digital mining for Bitcoin and actual mining for gold.

By returning 10 times more than the NASDAQ 100, bitcoin was the best-performing asset of the decade.

By 2027, Bitcoin may have surpassed the value of all the gold in the world if its four-year annualised average growth rate of 70% per year is maintained. That would be equivalent to almost $600,000 per Bitcoin in today’s money.

Growth in Widespread Adoption

According to information provided by the digital asset management company CoinShares, the adoption of bitcoin has been growing at a rate of 113% every year. (In contrast, internet adoption was slower, at a rate of 63%.)

The paper makes the case that there will be 1 billion users by 2024 and 4 billion users by 2030 if people adopt Bitcoin at a rate similar to that of the early days of the internet (or quicker). There are reportedly between 200 and 300 million users at this time. Therefore, there might be up to three to five times as many Bitcoin users in just two years!

The quantity of users and the cost of Bitcoin are correlated, as you may anticipate.

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The Stock to Flow (S/F) Ratio

The Stock to Flow (S/F) Ratio is a well-liked model that bases value on the idea of scarcity. The ratio between a commodity’s present stock (such as the supply of bitcoin that is now in circulation) and the flow of new production is known as stock to flow (i.e. newly mined bitcoins). The S/F Ratio can be used as a model to forecast future Bitcoin valuations because its price has historically followed it.

The US dollar was made the official world reserve currency by the 1944 Bretton Woods agreement, a title it still holds today.

Due to our current, deeply ingrained norms for dollar accounting and asset pricing, I anticipate that the dollar will remain the world reserve currency for the foreseeable future. However, I believe that Bitcoin could become the worlds reserve asset within the next 10 years.

The CEO of MicroStrategy, Michael Saylor, is the owner of 121,044 Bitcoins. From a regulatory standpoint, he contends that treating bitcoin as an asset as opposed to a currency makes things simpler. Saylor stated that all of the restrictions “basically restrict your usage of a digital asset as a money rather than as a property,” and that if you accept that, it’s simple to see that the industry’s future is “very bright.”

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Governments won’t voluntarily give up control of their currencies, I’m confident of that, but if there isn’t a coordinated international effort to create a Bretton Woods-style framework that sets guidelines for currency exchange rates, it will happen anyhow — just in a different way.

A currency is only valuable because we supposedly trust it. Beyond that, it is nothing more than a sheet of paper with some faces and numbers on it. trust that the government will fulfil its commitments and that trust is just an accepted exchange of value.

Even if they appear to do so by altering the value of the paper the promise is written on, governments are not trusted to uphold their commitments, which compromises that trust. An alternative currency or asset is more likely to become a more reliable system as trust is lost, Bitcoin will serve as that substitute in the future.

Senator Rand Paul stated that “the government currencies are so unreliable — they are also fiat currencies” in October 2021. They are unsupported by anything.

As more and more people lose faith in the government, he said, “I’ve started to doubt whether or not cryptocurrencies could genuinely become the reserve currency of the world.”

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Crypto Mayors on the rise

Miami Mayor Francis Suarez said through Twitter that he would accept Bitcoin for his subsequent salary. Eric Adams, the next mayor of New York City, attempted to outdo him by announcing that he would accept numerous paychecks in Bitcoin. One of the youngest mayors in the city of 70,000 people, Jackson, Tennessee’s Scott Conger, embraced the friendly challenge and declared he would accept payment in bitcoin as well.

In other words, contrary to what the media may have you believe, it’s not just nerds, terrorists, and money launderers who buy Bitcoin.

Will Regulators Stop Bitcoin?

The supposed anonymity of Bitcoin in its early years encouraged a lot of criminal usage. It was well known that drug traffickers used it; the Silk Road market is the best example of this. It was an area of the ‘dark web’ where users could purchase illegal substances. Bitcoin was utilised in every transaction on the Silk Road. The FBI eventually shut it down in October 2013.

However, for individuals looking for anonymity, Bitcoin has a number of significant problems. In particular, Bitcoin keeps a permanent record of every transaction for the public to see. Once a person is associated with an address, other transactions involving that address can also be associated with that person. Nowadays, competing cryptocurrencies like Zcash and Monero offer far better privacy protection. Due to the current circumstances, illicit behaviour is shifting away from Bitcoin.

The market as a whole would benefit from regulations and clarity in the area since it would be seen as legitimate by the general population. Additionally, they can increase Bitcoin’s acceptance and lower its volatility.

To address regulators’ top concerns regarding all cryptocurrency exchanges, AML and KYC standards are currently in place. Additional regulatory adequacy may inspire institutions to invest in Bitcoin with greater assurance.

The Financial Conduct Authority (FCA) in the UK is training its staff with the help of crypto experts in an effort to increase monitoring. To combat money laundering and terrorist financing, the regulator is stepping up surveillance.

The FCA is educating its staff to spot financial misconduct rather than aiming to outlaw Bitcoin. Unprecedented transparency characterises Bitcoin’s operation. All Bitcoin transactions are visible, auditable, and recorded in the Bitcoin network permanently. Any address’s balance and all transactions are visible to anyone.

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