(Note: Neither this or any of my other posts are financial advice. This is my opinion provided for entertainment purposes only.)
Today we are going to look at which outcome is more likely, $0 Bitcoin or $1,000,000 Bitcoin.
It's one thing to see a green line going up on the chart and make bold predictions of future price increases. But price is a function of supply and demand, so lets take these two inputs and see what they tell us.
Let's just get this out of the way: A $0 Bitcoin is practically impossible. It's technically possible, but it's practically impossible. What do I mean by this? I mean that while it's not that complex of a scenario to play out, it will never happen. Here's why:
Me swimming across the Atlantic Ocean is practically impossible. It's technically possible however. All I have to do is get in the water and then move my arms and legs until I get to the other side. See? Easy! No scientific breakthroughs required. Of course, we all know how that scenario would really play out.
I'm going to take this perspective and apply it to Bitcoin. Price is a function of supply and demand. it's the average of the highest bidder and the lowest seller. For bitcoin to go to $0, there would have to be nobody in the entire world with a buy order over $0 for Bitcoin. All you need for $0 Bitcoin is for everyone to cancel their buy orders, its just a few clicks; easy, right? Just like all I have to do to swim across the ocean is move my limbs until I get there. It doesn't matter if Bitcoin turns out to be totally useless or some evil Ponzi scheme. Unlikely to say the least, but lets pretend. There would still be someone out there willing to buy all of the Bitcoins for $0.01 each just to say they did it. And there would probably be someone else also after that silly title, "owner of all the Bitcoin", and he might be a billionaire willing to pay even $0.02 per Bitcoin just to outcompete the other guy!
If you don't believe me, then I challenge you to look at what happened to Hertz stock in 2020. To put a long story short, Hertz came out and declared bankruptcy. Essentially saying, hey everybody, our stock has $0 value, none! We are bankrupt! We are totally insolvent as a company and failing pretty badly! What happened next, well of course all the degenerate meme stock traders saw how CHEAP it was! Oh boy, Hertz stock for pennies on the dollar! We can like, totally buy up the entire thing for the memes! Yeah, and that's just some lame car rental company. There were of course other car rental companies on the market, non bankrupt ones even. But people still bought Hertz. Now imagine the same scenario for something like Bitcoin. Bitcoin is a cultural force at this point, forget the economics of it. There will always be someone ready to buy it if the price is cheap enough. You can sell defunct currencies that have zero monetary value for real money today, they are collectors items if nothing else. How would Bitcoin be any different?
Switching sides now to the $1,000,000 Bitcoin. Well I'll be the first to admit, even as a Bitcoin advocate, that's a pretty steep price. But in the realm of probability, it's probably many thousands of times more likely than $0. There are several different scenarios that could cause this. If the US keeps printing money at the rate it has over the past couple years, it would happen by default via dilution of the dollar, and $1,000,000 Bitcoin would only take a little over a decade, and that's assuming sentiment and supply/demand staying constant. Of course sentiment and demand are very likely to improve, but just for the scenario let's say they remain constant. So essentially if nothing else changes, you could have $1,000,000 Bitcoin just by dilution of the US Dollar at the current rate. Now I don't know what your million dollar Bitcoin would be able to buy you, but hey $1,000,000 is $1,000,000, we won here on the technicality.
Now for the love of all that is good and holy, I sure hope they don't keep printing money at this rate. It's likely to drop off, because this dilution of the US Dollar is not sustainable. But that's not the topic of this post. Anyways, so even if the inflation rate comes back into the realm of the sane, that doesn't mean Bitcoin won't go up. Bitcoin still managed to go from worthless (when it was just created in 2009, of course there were no buyers yet!) to approximately $20,000 in 2017, in the realm of less than 2% inflation per year, on average. The takeaway here is demand is increasing drastically, and there's hardly a reason to believe it would stop. Bitcoin's adoption rate has passed that of the internet in it's early days. Would you have looked at the internet in the 2000's and said, "Oh this thing is just a dumb fad, it will go away." I wouldn't have either.
Anyways that's all I wanted to cover in this post. The next time you hear some old man yelling at Bitcoin, just know they have no idea what they are talking about. Anyone who claims Bitcoin will go to $0 is, simply, clueless. Poor souls.
