Bitcoin rising to $20 million in 20 years sounds like something impossible to achieve. But a closer analysis of the data reveals that it’s not a pipe dream, but the inevitable result of a combination of mathematical laws and human characteristics.
Someone bought a bitcoin for $2,400 in 2017, and based on the 65% compound annual growth rate over the past eight years, the value of that bitcoin has now multiplied many times over. What’s even more amazing is that even if you drop the growth rate to 20%, that bitcoin will be worth more than $5 million in 20 years. This is not a gambler’s wild fantasy, but a reality deduced from data – as long as governments continue to print large amounts of money, the price of bitcoin will continue to rise.
Bitcoin’s core value has never been for speculation, but rather as a tool against government currency devaluation. Since 1971, when the U.S. dollar was unpegged from gold, global currencies have become “pieces of paper” that central banks can print at will; the Federal Reserve’s balance sheet ballooned from $900 billion to $8 trillion after the 2008 financial crisis; and the U.S. printed the same amount of money as it did over the past 200 years in just two years during the 2020 pandemic. monetary totals. This extra currency out of thin air is reducing everyone’s wealth in the form of invisible taxes. Some have calculated that the purchasing power of the dollar has fallen by 40% over the past decade, and the euro has depreciated even more. Whereas the total number of Bitcoins is fixed at 21 million forever, with the mechanism of halving production every four years keeping the new supply down, this scarcity has become the most solid support in the age of flooding government money.
Scarcity is also being amplified at an accelerated rate by large corporations.MicroStrategy is spending billions of dollars to buy tens of thousands of bitcoins at a time, essentially reducing the amount in circulation from the market. At current prices, buying away 1,000 bitcoins means 1,000 people have lost the opportunity to own an entire bitcoin forever. More critically, more than 4 million bitcoins have already been rendered permanently unusable due to the loss of their private keys, with less than 15 million actually in circulation. When 7.8 billion people around the world start competing for those 15 million bitcoins, what heights will the price be pushed to? Just look at gold, which has been mined around 200,000 tons globally, yet the price per gram has managed to stabilize at over $60 per gram. Bitcoin’s scarcity is one ten millionth of that of gold, and its potential for value growth can be imagined.
Many people worry that they can’t afford to buy a whole Bitcoin, but they forget that the best part of Bitcoin’s design is that it’s divisible. 1 Bitcoin equals 100 million Satoshi, so even if it goes up to $20 million in the future, you can buy 50 Satoshi for $100. This divisibility keeps the average person from being completely excluded, but most people are still making the same mistake – thinking it was a scam when bitcoin was 1 cent in 2010, hesitating when it was $2,400 in 2017, being scared when it was $60,000 in 2021, and now that it has broken through $100,000 it’s starting to struggle again “is it too late”. History always repeats itself: people always pay no attention when they can afford it and regret it when they can’t. Just like in 2009, 1 dollar could buy 10 billion satoshi, now 1 dollar can only buy a few hundred satoshi, and the speed of this value dilution is still accelerating.
The entry of big institutions is changing the game. In addition to MicroStrategy, large companies such as Tesla and PayPal have begun to include bitcoin in their asset allocation, and central banks are quietly increasing their holdings. These players are not here for short-term speculation, but to treat bitcoin as “digital gold” long-term holdings. When a large number of funds continue to flow, the original scarcity of circulation will be further locked, the supply and demand imbalance will be more serious. Look at Maotai, annual production of only 56,000 tons, but support 2 trillion market value, the core reason is scarcity and institutional positions. Bitcoin’s scarcity is a million times that of Maotai, and its market capitalization potential is far from being released.
The continued devaluation of government currencies is an invisible driver of bitcoin’s price rise. With central banks around the world printing money at a rate of 5-10% per year, the purchasing power of a dollar in 20 years could be only one-fifth of what it is today. Whereas the total amount of bitcoin is fixed, every cent of government currency inflation is a disguised boost to bitcoin. Some have calculated that if the annual inflation rate of government money stays at 5%, the price of Bitcoin will have to rise at least 10 times in 20 years to maintain the same purchasing power, and that’s not even counting the scarcity premium of Bitcoin itself. When people finally realize that their paper money is losing value, they will flock to Bitcoin as a “safe haven,” and this group behavior will become a second-tier driver of price increases.
Technological advances have made Bitcoin’s advantages more and more apparent. From the initial ordinary computer mining to the current professional mining machine, from peer-to-peer transactions to the lightning network, the bitcoin infrastructure is constantly improving. Just like the Internet’s leap from slow Internet access to 5G, technological upgrades lead to more usage scenarios and drive demand growth. When cross-border payments and asset settlements can be accomplished with Bitcoin, its value will no longer be limited to “digital gold,” but will become the new infrastructure of the global financial system. This shift from a speculative tool to a practical currency will push prices beyond imagination.
Human greed and fear play a key role in this. Early holders hold on because they believe, later holders hesitate because they are afraid, and the big players take advantage of this psychology to keep collecting bitcoins. Look at every bull market in history, it started when most people were skeptical and ended in a national frenzy. Bitcoin’s price cycle has never changed, it has just become more volatile. When $20 million becomes the new consensus, more people will buy regardless, creating a self-fulfilling prophecy. Just like housing prices, the more it goes up, the more people buy it, and the more it goes up, until everyone believes it’s “always going up”.
Of course, skepticism has always existed. Some people say that Bitcoin is a bubble and a scam, but these people tend to ignore the fact that the essence of a bubble is a mismatch between value and price, and that Bitcoin’s value is based on an unlimited supply of government money. When government money itself becomes the biggest bubble, Bitcoin instead becomes the most reliable asset. when the German mark collapsed in 1923, someone traded a cartload of paper money for a loaf of bread, and the price of gold went up tens of billions of times. History won’t repeat itself exactly, but it will be similar, and when the next government currency crisis hits, Bitcoin may be the new gold.
The biggest mistake the average person makes is always trying to “bottom out”. The best strategy for investing in Bitcoin is to buy on a regular basis, regardless of price. Some people have looked back at the data and found that even if you buy at the peak of each bull market, you can still make money if you hold it for more than 5 years. This is not luck, but the inevitability of scarcity. Just like buying Tencent stock in 1990, no matter what price you bought it at, you are now a winner. Bitcoin’s time compounding is more reliable than any technical analysis.
The price of Bitcoin in 20 years is essentially a choice of “trust”. When people stop trusting central banks and government currencies, they will put their trust in Bitcoin. This transfer of trust doesn’t happen suddenly, but gradually, over inflation and crisis after crisis. Just like the gold coins of the Roman Empire, which went from pure gold to adulterated, and were eventually replaced by a more reliable currency. Bitcoin is repeating this historical process, only faster and more widely.
A final tally: at a 65 percent compound growth rate over the past eight years, the price of bitcoin will exceed $100 million in 20 years; even at a conservative 29 percent, it could reach $20 million. This is not a prediction, but a mathematical calculation. When government currencies, technological advances, human characteristics, and the entrance of large institutions are all driving the price up, $20 million may not be the end of the line, but a new beginning. Those who laugh at this number now may be repeating the mistake of 2010 – when someone bought two pizzas for 10,000 bitcoins, a sum now worth $2 billion. History has given opportunities and will give them again in the future, it just depends on who is willing to take them.
Author: BitcoinKOL，Source: https://bitcoinkol.com/bitcoin-prediction-bitcoin-will-surpass-20-million/
