Can Bitcoin Reach One Million Dollars?

--- by D. Petkovski ---

Can Bitcoin reach million dollars? Undoubtedly!

Probably not this cycle, but why am I so sure that it’ll happen at all?

Well, let’s forget about Bitcoin for a moment.

Let me take you on an eye-opening journey… And by the time you’re done reading, you’ll be as certain as I am.

Table of Contents

House Prices in 1963

I found this post showing the house prices in the same place in 1963 vs. today.

Here’s the image:

Do you think that there is a anyone that expected the house prices to rise from $17k to $1.35M?

Even the ones aware about currency devaluation and inflation wouldn’t make sense of an 80x increase in price.

But there it is.

And we know there weren’t major breakthroughs with the technology or materials. I mean, we’re probably more efficient today, but not 80x better, right? So what justifies this price increase?

Well, prices don’t increase magically. But things seem more expensive because the currency lost its purchasing power.

We’re measuring the house prices in points that are being diluted year over year via quantitative easing.

Here’s another post showing a house ad:

Prices of Other Assets Over Time

There is at least one armchair economist that thought something like “but you can live in a house” while reading the previous section.

Well… People can’t live in shares of companies, but still, here’s the performance of the stock market since the 1930s:

Now, imagine the experience of the person holding the assets instead of cash.

Instead of things becoming “more expensive”, everything seems cheaper for them. Because they decided to use a superior technology to preserve their energy/past productivity.

And while inflation hurts the ones looking to buy assets, it benefits the ones that are holding the assets.

It’s in everyone’s best interest to overcome the fear and their underestimation bias, and start stacking assets as early as possible. But most people normalize their government’s currency as a point of reference and end up sacrificing their purchase power.

Prices of Consumables and Luxuries

Now let’s switch the focus from things that are designed to go up in price to something else.

Here’s another post – showing an interesting advertisement from 1996:

So, in 1996 they ~~thought~~ felt that a meal of $16 would stop people from eating out.

But is really the case?

Here we are, almost 30 years later. And would you, as a person living in the present, find $16 a high price for a burger and fries? I don’t think so!

In 1996, it seemed crazy for a person to spend so much on a meal. Now it can even seem like a bargain. Actually, here’s a photo of a recent delivery I ordered on Uber Eats – 2 hot dogs and fries for €44:

As someone that remembers paying around €0.4 per hot dog as a kid, €44 for this order can feel mind-blowing.

But it isn’t.

And in 10-15 years, when you go to McDonalds and a meal costs you $80+, imagining any price for anything won’t be that difficult.

Rising Prices Explained

I don’t find any price surprising anymore because I understand how the money printer makes everyone poorer.

I understand exactly what I’m seeing when looking at this image of the M2 Money Supply:

For the n00bs: this is the amount of currency in circulation over time.

Money created out of thin air at the will of the Federal Reserve, the central bank of the USA.

And it all starts to makes sense… If we have 1000 desirable units of something and $1,000,000 in circulation, each unit would cost $1,000. But if the next day we magically increase the money supply to $2,000,000 (without an increase in the units’ production / output / technology / supply or demand), then each unit’s price will “rise” to $2,000.

But nothing really “rises”.

These units are still equally valuable as yesterday. They still cost similar relative to other assets or moneys (such as gold or silver).

They just “seem” more expensive because we’re measuring their “price” in an asset that lost value due to exponentially rising supply.

Can Bitcoin Reach $1M?

Back to the original question!

And again, forget about Bitcoin.

Over a long enough time frame, a loaf of bread will “reach” $100, like it did in many currencies. And that will be a smaller jump than going from $0.1 to $3.6 since 1930 (source1, source2).

So saying that Bitcoin, or anything else, could or could not reach some dollar amount at some point in time is meaningless.

Because we don’t know what $1M would represent at an arbitrary moment in the future.

A dollar from 2000 is worth $0.54 today.

FIAT currencies are not equal over time!

This is where Bitcoin is different. It has a fixed supply and we know that there’ll never be more than 21M $BTC.

So the only correct answer about what Bitcoin will be worth in the future is best represented via the following meme:

1 BTC == 1 BTC

Now, your turn. Explain this picture:

And for the record, I think Bitcoin will trade for $1M way sooner a loaf of bread costs $100 or $1k.

Most probably within 3 cycles (i.e. in less than 15 years).

Author

D. Petkovski

📓 The Author Husband & Father
Software Engineer StrengthCentric
₿itcoin Hodler Long-Term Investor
🌍 Everything Enthusiast 🔥 Optimist

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