This Isn’t Another Bitcoin Bubble
Almost exactly three years ago, Bitcoin reached an all-time high price just shy of $20K, before plummeting back down to earth.
Since February, I have been consistent in my predictions about a fundamental disruptor in the financial space that is poised to massively affect global financial markets in the coming years. I was one of the earliest voices predicting a $20K-plus price point for Bitcoin by year’s end.
Almost exactly three years ago, Bitcoin reached an all-time high price just shy of $20K, before plummeting back down to earth. I stand by my prediction that we’ll break that high water mark by the end of this year and that it will steadily grow. I’m not alone in this prediction. What’s more interesting is the “why?” behind this year’s bull market, and what makes it different than the 2017 surge.
We see a rise in BTC simply because there are more buyers than sellers. This has a lot to do with “Bitcoin Halving,” which reduced the supply of new BTC by 50% in May of 2020. But the increase in buyers has to do with a lot more.
Recently, companies like PayPal and Line (Who is a Celsius partner) started allowing their users to buy, sell, and trade crypto on their platform. Since then we have welcomed millions of new retail investors to crypto. But as we continue to introduce more investors, we have to understand there is a limited supply of BTC. This adoption of an increase in investors then allows the price of BTC to increase as well.
Additionally, people have the option to invest in a currency that isn’t subject to the recent struggles of the US dollar. Consumer spending has been extremely low this year, but the Fed has printed 20% of the USD that has EVER existed just in this year alone. BTC has done the exact opposite.
So the $18k spike we experienced this week is the very early stages of BTC reaching an all-time high this year. Five years from now, BTC will likely be worth ten times more than it is worth today because of the scarcity effect and continuing inflation.
My message to the Celsian community who has been earning a 6.2% on top of their BTC will remain the same: This is different from what we saw in 2017. The hype and “ the fear of missing out” which was very concentrated in the retail community are not here anymore.
In conclusion, people must understand that there is no return in bonds, and they carry many risks. And buying into the stock market at all-time highs in the middle of a pandemic and a recession does not sound like an appetizing proposition.
The average person used to save less than 10% of their income, but during COVID, we spent less and saved more. People are now saving up to 30% of their income or even more. But just because the world is going through a severe recession, it doesn’t mean you can’t be financially stable.
The Fed has always wanted you to spend your money and not save it. But we now have the opportunity to use all these savings and have them work for us.