Will Bitcoin hit $400,000? It will – and this is why
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Bitcoin. You’ve probably heard of it. Some people think it’s a scam and other people treat it like a religion, in this video, I wanted to put myself between the two and speak objectively of what makes good money and why Bitcoin even has value. The truth can be hard to see through the hype so first, what just happened to Bitcoin?
Bitcoin finally smashed through its all time record high of $20,000 for the first time ever. In today’s video I wanted to show you why that happened, and the price of Bitcoin is ultimately going to go and why.
Gold has historically been the best form of money that humanity has ever created – until now. Let’s see what makes good money valuable and why people think Bitcoin is the new gold. In order for money to be considered a “good money” it has to have 5 properties.
1. Divisibility. Gold, is not really divisible in it’s purest form, I can’t shave off a few chunks of gold and pay you with precisions. The dollar is only divisible up 100 times, which is 100 pennies. But with 1 Bitcoin, I can divide it into 100,000,000 pieces – those are called Satoshis which is an homage to the entity that created Bitcoin. Divisibility is important in moving us toward a more efficient on demand economy where can focus on consumption based taxes instead of income based.
2. Durability. Gold is bad because it’s easily melted and mixed with impurities, and fiat is arguably worse because you can destroy paper pretty easily too.
3. Rarity. That sounds like an easy thing to do but it took civilization forever to agree on a standard we were all happy with because the people who lived by the beach wanted to use sea shells which is obviously more abundant near the ocean. That’s why we used Gold because it was relatively evenly spread out, it was pretty hard to find, and it was like that for everyone around the world. The dollar however, is the exact opposite because it’s printed by the billions of dollars a day sometimes which is why they say your money loses value to inflation, because we keep creating more of them.
4. Acceptability. Money has to be accepted by society worldwide, whether it’s your local grocery store or the internet.
5. Uniformity / Fungibility. This means each unit of value is exactly the same. Bitcoin actually has a problem here that I think it will be solved in the future, but the problem is that we can track each Bitcoin’s origin from wallet to wallet meaning in theory, certain Bitcoins are tainted with criminal activity that can be repossessed by the government, while others can be seen as pure – obviously the pure ones are going to be more valuable than ones that are not. That problem will eventually be solved once Bitcoin solves privacy with techniques like shuffling or mixing.
So why is the price jumping above the all time high of $20,000? It’s finally now that respected hedge fund managers are starting to realize it for themselves which is why we’ve recently been seeing investors pour billions of dollars into Bitcoin – they finally see the light and understand that at this point, it has become more of a risk to not own any Bitcoin than it is to at least hold some.
But that’s the narrative, the reality is they’re all smart, and they, along with banks and corporations, have already been slowly buying for a long time while telling everyone else that it was a scam. Even the Chief Investing Officer, Scott Minerd of Guggenheim Investments – has publicly come forward in saying that his billion dollar hedge fund has been investing in Bitcoin since it was at $10,000 and his team thinks Bitcoin will eventually go to 400,000 per coin – that’s the fundamental value of it.
Coupled with economic uncertainty and the federal reserve’s stance on infinite quantitative easing – and we have a perfect storm. An asset class that’s going to continue outperforming everything else.
*None of this is meant to be construed as investment advice, it’s for entertainment purposes only. Links above include affiliate commission or referrals. I’m part of an affiliate network and I receive compensation from partnering websites. The video is accurate as of the posting date but may not be accurate in the future.