Bitcoin is Still Cheap

The price of Bitcoin has hovered close to $100,000 for the last 2 weeks. A 6-digit price point for Bitcoin is one that we have never seen before. We are talking about an unprecedented price point.

Some would say that the price of Bitcoin can’t go much higher.

I would argue that Bitcoin is cheap.

It’s interesting that roughly a year ago today the price of Bitcoin was roughly $37,000 and there were murmurs that Wall Street would back Bitcoin like they never had before with their spot ETF products. These murmurs became true in January of 2024. Wall Street was officially here. Since then, these products have broken numerous ETF records and we have seen the price of Bitcoin more than double.

Now, there are murmurs of the United States adopting a Strategic Reserve of Bitcoin for their balance sheet. Along with these murmurs, we have all of the following occur just this week:

• A bill to create a strategic Bitcoin reserve has been introduced in Brazil.

• Switzerland passed legislation to study how Bitcoin mining can balance the grid and use wasted energy.

• Hong Kong plans to make exceptions for capital gains taxes on gains from cryptocurrencies for private equity funds, hedge funds, and investment vehicles.

• Morocco has legalized Bitcoin and other crypto after a 7-year ban.

• China and Russia both recognize Bitcoin as property.

I will summarize all of the above occurrences with the idea that Nation State adoption is turning a corner and game theory is beginning to play out. If the United States leads, all other countries will be required to follow or else they will lose. With all of these noteworthy events occurring, I believe we are firmly on the way to holding Bitcoin becoming a norm for governments worldwide.

This is one lens from how Bitcoin is currently cheap. If all of these nation-states choose to adopt Bitcoin, there will be a federal-level demand that retail markets and even corporations cannot match. With this new demand, prices will inflate because of the fixed supply that Bitcoin offers. Simple supply and demand equations explain what will happen.

On a different but similar note is the conversation about how much of the world’s wealth Bitcoin can absorb. I will once again emphasize that I dislike providing price predictions. I instead enjoy providing factual perspectives and thoughts about what could happen. I have personally seen more than 3 clips this week of respected investors speaking on mainstream news channels where they discuss the idea that Bitcoin go up in price exponentially. If Bitcoin goes up exponentially and were to reach the market cap of gold, that is roughly a 9x in price from here. I believe with a high level of conviction that this is possible. I believe passing gold is a logical next step for where Bitcoin can go as it continues to emerge as the world’s apex asset for capital preservation.

Additionally, if you run the numbers and if Bitcoin were to return 24% annually, or the worst 4-year compound annual growth rate (CAGR) for Bitcoin in its history, the price of Bitcoin would be $215,000 in 4 years, $267,000 in 5 years, and $782,000 in 10 years. However, the actual CAGR for Bitcoin is 50%. This means in 4 years it would be $461,000, $691,000 in 5 years, and $5.2 million in 10 years.

Michael Saylor is also telling everyone he talks to that Bitcoin is going to 13 million dollars a coin and that any other trade is an opportunity cost of 13 million dollars. 13 million dollars is his BASE case.

However, his bullish case is that it goes to 49 million dollars. I have sent his presentation to at least 5 people over the last week and highly encourage anyone to watch it if you have not. It will reset your expectations for what is possible.

All of this information should provide you with a new perspective that while 1 Bitcoin currently costs close to $100,000, that is still cheap for what the future will hold. I cannot predict the future, I can only use the information at hand to increase or decrease my level of conviction and belief in what is possible. I will say I was right about what would happen when the Bitcoin ETFs were approved, I believe that a year from now, I will be right about the upcoming nation-state adoption.

You are still early.

Bitcoin is still cheap.

Stack SATs.

The views and opinions expressed here are for entertainment purposes only and should, in no way, be interpreted as financial or investment advice. Always conduct your own research when making an investment or trading decision, as each such move involves risk. I am not a financial advisor and do not claim to be qualified to convey information or advice that a registered financial advisor would convey to clients as guidance. Nothing contained in this e-mail/article constitutes, or shall be construed as, an offering of financial instruments, investment advice, or recommendations of an investment strategy. If you are seeking financial advice, find a professional who is right for you.