This exercize will look further out into the future, 5 to 10 years, to demonstrate why Bitcoin’s price does not matter right now. We understand that is hard to do. Remember, that there will only ever be 12 million Bitcoin produced. Now, that is 900 Bitcoin per day, then after 210,000 blocks are produced at that level it will drop to 450 Bitcoin per day. That will happen in 2024. Then in 2028, it will drop to 225 Bitcoin per day. This happens regardless of the demand for Bitcoin. At the same time, lets look at fiat currency production (money supply). Now that the impeachment trial is over. The senate and congress can focus on the $1.9 trillion stimulus package put forth last month. If it passes, which appears likely now that the democrats have control of all three phases of the government. Adding $1.9 trillion to the money supply, as it stands now, would mean 40% of all dollars in circulation have been printed in the last 12 months. So in USD terms, Bitcoin’s price has to increase over time unless demand for Bitcoin drops to almost zero. USD is not a viable replacement for Bitcoin. Gold is the most likely candidate as a scarce asset. Yet Gold has lost 99% of its value, priced in Bitcoin, over the last 5 years:
So that is unlikely as well. Even if the US were to go on to a Gold standard backing a digital currency. Bitcoin demand would still exist, as it is much scarcer than Gold. If Gold price increases, production increases. If more Gold is somehow found in the future, supply just increased as a result. Yet with Bitcoin, nothing can change the programmatic tightening of Bitcoin supply, regardless of the demand. We have spoken recently of exchanging Bitcon for real estate when or if Bitcoin hits its peak later this year. Below is a chart on how to do that, follow this left to right, it is numbered 1 through 6:
Bitcoin is also decentralized, which we have also brought up a lot in past blogs. It cannot be controlled by any central bank or government. If the central bank keeps up the rate of stimulus and QE (quantitative easing) in 2021-2023, the value of the USD will fall, garaunteed. It may even collapse at some point. Who knows when. We believe it is likely that stimulus and QE will continue to some degree over the next two years. Therefore, it is likely the US dollar continues its precipitous fall. Here is a recent chart of the DXY (USD index):
Keep in mind, many experts have been predicting a major stock market crash in the April timeframe. If the market crashes there would be a rush into the dollar. This chart predicts a bounce. But the above point we were making, is that the DXY has gone from 104 (pre-Covid 19) to 90. That is a major drop. If the above scenario does play out and the stock market crash predicted actally happens, the DXY and Gold would bounce. See the Gold chart:
If Gold bounces when the market crashes which way would Bitcoin go? It may very well drop off a little, as it is re-accumulating just under $50K right now. We do not believe Bitcoin would drop below $40K. That floor has been established for now. But looking out long term. The overall supply shock of the May 2020 Bitcoin halving and the future, 2024 Bitcoin halving, coupled with all of this stimulus and QE from the Fed. That is going to catapult Bitcoin up. It has since March 2020, when Bitcoin was under $4,000 for a day, now it is $48,602 and it hit $49,665 yesterday. These global macro trends changed because of covid 19. Or at least the trends sped up. So, that means more money supply growth from now until end of 2024, to varying degrees, will greatly push up demand. We have already seen corporations, hedge funds, institutional investors buying up Bitcoin at amazing rates in 2020 and 2021. This is the demand side of the equation. Once the 2024 halving occurs, another supply shock will set in, and Bitcoin could catapult close to the levels in the first chart we showed on page two. It may take until early 2025 to reach $1million per Bitcoin. But looking at the past bull market cycles, Bitcoin could easily reach this level in the next cycle (2024-2025). Use your Bitcoin stack to leverage it into real estate, or fine art. Anything scarce. A flood of money supply has been hitting the market and your dollars buying power is plummeting! The only life boat to save a person is a large stack of Bitcoin. Diversify into Gold or Ethereum, fine art, real estate. So focus on how much Bitcoin you own, not how much one Bitcoin is worth. Over years of time the value will grow at an amazing rate. Supply/Demand! This is your life boat. Do not expect the Government to save you!
Neutral ATM buys and sells Bitcoin as little as $20 at a time! You do NOT have to buy an entire Bitcoin. Neutral ATM is here to get everyone off of zero Bitcoin.
Give Neutral ATM a try. We have low rates, convenient locations and we are expanding. Contact Neutral ATM, we will answer all your questions about Bitcoin and using our ATM machines. Find a Neutral ATM Bitcoin machine location near you.