Let's do an equation to forecast Bitcoin price. 1800 Bitcoins being mined a day at $7,000 that is $12,600,000 USD per day. This means that assuming supply and demand are otherwise equal that nearly $13,000,000 USD needs to be invested every day just to keep the price at $7,000.
Seems like a lot right? Let's extrapolate out until the next halving of Bitcoin in approximately 3 years; (1000 days). Over the next 1000 days only $13,000,000 of new investment dollars can enter Bitcoin without the price rising. At that point the reward again halves to 900 coins per day for the following 1500 days; allowing an additional $10,000,000,000 to be invested without causing the price to rise.
At a price of $7,000; over the next 7 years (2500 days) a total of $23,000,000,000 can be invested without causing the price to rise (again; assuming supply and demand is otherwise equal).
Bitcoins current market cap is $120,000,000,000. If you are curious whether it is possible for Bitcoin to support higher prices in the short term; it comes down to how much money is trying to enter Bitcoin; and over what time period.
$13,000,000,000 isn't as much as it sounds. Lets say that there are just 5 million people using bitcoin today. $13,000,000,000 / 5,000,000 = $2,600 dollars each. Provided that $2,600 is the average amount each individual invests over the next three years, we've maintained that $7,000 price.
It sounds like a lot; but it's not much at all when we are consider that this is a brand new asset class and industry; available globally to all markets. Bitcoin could sustain much higher prices after this simple thought experiment.
Why I think Cryptocurrency is getting too big to ignore.
Seems like a lot right? Let's extrapolate out until the next halving of Bitcoin in approximately 3 years; (1000 days). Over the next 1000 days only $13,000,000 of new investment dollars can enter Bitcoin without the price rising. At that point the reward again halves to 900 coins per day for the following 1500 days; allowing an additional $10,000,000,000 to be invested without causing the price to rise.
At a price of $7,000; over the next 7 years (2500 days) a total of $23,000,000,000 can be invested without causing the price to rise (again; assuming supply and demand is otherwise equal).
Bitcoins current market cap is $120,000,000,000. If you are curious whether it is possible for Bitcoin to support higher prices in the short term; it comes down to how much money is trying to enter Bitcoin; and over what time period.
$13,000,000,000 isn't as much as it sounds. Lets say that there are just 5 million people using bitcoin today. $13,000,000,000 / 5,000,000 = $2,600 dollars each. Provided that $2,600 is the average amount each individual invests over the next three years, we've maintained that $7,000 price.
It sounds like a lot; but it's not much at all when we are consider that this is a brand new asset class and industry; available globally to all markets. Bitcoin could sustain much higher prices after this simple thought experiment.
Why I think Cryptocurrency is getting too big to ignore.
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