Why is One Bitcoin Worth $18,000?
$330,000,000,000 (330 Billion Dollars)
That is the total current value stored on the Bitcoin network.
In early 2009, not a single Bitcoin existed. Today, over 18 Million of them exist and each one is worth $20,000 (18.5 million x 18,000 = 330 Billion Dollars of Value).
How is this possible? Who is buying these “digital coins,” and more importantly, who is not selling?
A Bitcoin is a unique ASSET.
$18,000 is roughly, at this time of writing, the “market” price of a Bitcoin. This does not mean that everyone values Bitcoin equally. Some people see Bitcoin as being worth nothing, some people see Bitcoin as being worth around $18,000, and some people see a single Bitcoin being worth $10,000,000+.
All value is subjective to each individual person throughout the world. Each person has the opportunity to buy, sell, hold, or do nothing with Bitcoin everyday they wake up, whether they are consciously thinking about it or not.
This begs us to ask the question, why do some people value a single Bitcoin so highly? And why has Bitcoin been one of the best performing assets of the last year, 2 years, 5 years, and 10 years?
Michael Saylor, MIT alumnus and Founder/CEO of MicroStrategy, a billion dollar publicly traded tech company, says “Bitcoin is capable of collecting all the monetary energy in the world, storing it securely & perpetually without power loss, and channeling it efficiently to anyone or anything at the speed of light.”
Some people say Bitcoin is money, Bitcoin is digital gold, or Bitcoin is currency, but no single comparison fits Bitcoin perfectly.
Bitcoin is Bitcoin.
Bitcoin’s unique characteristics make it unlike anything we have ever seen before.
These unique properties make Bitcoin the ultimate SAVINGS TOOL. It is what you use to save your wealth for the future.
Unlike other savings tools, like gold, dollars, euros, stocks, or bonds. Bitcoin is the superior tool for preserving your wealth for the long run.
The other tools mentioned are far inferior compared to bitcoin for multiple reasons.
- None are as scarce as Bitcoin. Meaning if their market price becomes too high, people will simply mine more gold or print more money.
- They require trust in other humans. Fiat money requires you to trust both your government and central bank, and historically they are very consistent at breaking that trust.
- As far as stocks, you have to trust that executives are able to grow their cash flows at a faster rate than monetary inflation.
- Bonds require you to trust that someone will pay you back like they promised, and you must hope that by the time they give you back your money, it was not devalued by the government or central bank.
$18,000 — The World is Waking Up To Bitcoin
Bitcoin’s price, like all free market prices, acts as a signal. The continued upward price movement suggests a simple question.
Why are you storing your wealth in overpriced, over-financialized assets when the world has discovered a tool that is capable of storing all of the world’s monetary energy without loss over time?
Since Bitcoin is the ultimate SAVINGS TOOL, you no longer have to rely on others to keep and grow your purchasing power over time.
More and more people are beginning to understand this idea, and it makes for a reasonable explanation of why the price of Bitcoin tends to keep going up, violently, over and over again.
$18,000 is just the beginning of what Bitcoin will become.
Since Bitcoin is the ultimate SAVINGS TOOL, it simply has NO price top. Even at full adoption, it makes sense to use Bitcoin as a SAVINGS TOOL.
It is highly possible that we have no idea how valuable a single Bitcoin will be worth.
Even the most bullish price targets are likely wrong by orders of magnitude.
Written by Joe Burnett (@Moon__Capital), Research Analyst at Mimesis Capital.
