Bitcoin Set For 2020 Growth Based On Scarcity And Increasing Demand
According to Bloomberg’s latest Crypto outlook update (Jan 2020 edition), the popular cryptocurrency Bitcoin, as well as physical gold are both set for growth in 2020 based on fixed supply and more adoption.
While Bloomberg’s Galaxy Crypto Index (BGCI), which is monitoring a basket of top-shelf cryptocurrencies including Bitcoin, Ethereum, Monero, Ripple, and ZCash, is showcasing a +7.1% growth through 2019, Bitcoin alone had a +94.8% growth during the same period.
This is quite interesting and it eliminates the myth that suggested “it’s too late” to invest in Bitcoin post-2018. Practically if you owned $1000 worth of BTC in January 2019, the same amount would worth nearly double by December of the same year, without any intermediate trades, just pure holding.
Now, if you add the arbitrary opportunities presented during the infinite waves of ups and downs one could make some serious profit, considering that traditional stock markets throw a party when a stock hits +10% by the end of the year.
What keeps BTC ‘shinny’, even after a decade
John McAffee, aka the man who would eat his reproductive organs on national television if Bitcoin didn’t reach $1m a piece by the end of 2020, recently claimed his speculation back, saying that it was merely a promo tactic that worked in attracting more Bitcoin users, adding that Bitcoin is outdated compared to modern blockchain-powered financial systems and that we shouldn’t pay attention to it.
Before I explain to you why McAffee is wrong, you should revise 2017-18 and understand how he made his pump and dump generated cash. Essentially, John McAffee would tweet about some random ICO claiming that this is the next Bitcoin.
His blinded followers would invest in the token he already purchased like a week ago, and basically grow McAfee’s position. McAffee would flee the coin, redeeming his earnings into more stable projects, and would literally post exactly the same thing next week. He would say that the previous token was not the right one, but the one he’s promoting now is the next big thing in crypto. You can guess he didn’t stop in the second coin.
What I am trying to say, is that McAfee’s recent statements can only be translated into one thing: “Bitcoin is not what you need, but I’ll be tweeting about the next Bitcoin soon”.
So, putting aside John McAffee’s pump and dump adventures, why do I believe he’s wrong about Bitcoin? The short answer would be that I was never a fan of Bitcoin and will probably never be, yet my time in the scene taught me that it is the only reliable cryptocurrency out there and it has already proved that since 2009.
Besides the fact that Bitcoin leads the public crypto market with a difference since ever, it is one of the few-layer 1 blockchains left. In addition, it is the only cryptocurrency that was specifically designed to resemble physical gold’s attributes. In fact, Bitcoin is closer to gold than gold-backed cryptos.
Read More: Blockchain Finance: What To Expect In 2020
Bitcoin and Gold
BTC might not be the fastest and cheapest way to send short bits of digital money across the world, but neither is gold, and that is part of Bitcoin’s success, no matter how paradoxical it sounds.
Many argue that Bitcoin is not even a currency, but a store of value, similar to physical gold, and they’re partly right. Sure if you want to pay for a super-yacht in gold bars, I’m sure the yacht vendor could arrange that with his bank, but if you’d try to pay for your tomatoes in your local grocery store using gold dust, they’d probably laugh with you.
Accordingly, sending tiny amounts of monetary value with Bitcoin most of the time would require more fees and more blocks to proceed compared to the value of the transaction itself making it unpractical to choose for every-day operations.
On the other hand, sending millions from the north pole to Antarctica using Bitcoin can be as fast as sending a facebook message, for an analogous fee that in large monetary values is almost invisible.
Furthermore, similar to gold, Bitcoin’s scarcity is predetermined by nature (in this case by Satoshi Nakamoto) and as time passes and the demand increases the value of each bit of gold/Bitcoin will naturally grow.
In gold’s case, you could fit all the gold there is on the planet in an Olympic size swimming pool. Gold was mined for thousands of years straight and it is still being mined. In Bitcoin’s case, the amount of BTC reserves shorten algorithmically, and it is expected that all ever available 21 million Bitcoins will be minted and spread in circulation by 2140.
Similar to gold, Bitcoin is a standard accepted and utilized almost anywhere in the world, even if not all individuals hold or utilize this standard. This is part of the verification aspect both gold and Bitcoin posses. Basically, it is impossible to forge either of them.
The only practical difference between gold and Bitcoin, which is the main reason Bitcoin is the future safe-haven for investors and asset managers, is the fact that Bitcoin doesn’t require physical vaults to store it, no bulletproof vehicles to carry it, and no soldiers to accompany the trip from N. pole to Antarctica.
Finally and most importantly, Bitcoin certainly won’t need weeks to deliver and it can’t be ‘bijoued’. You either have real Bitcoin or you don’t. You can’t have a shitcoin wrapped in a Bitcoin coat as happens with partially fake gold bars.
Bitcoin is undeniably important for global economic stability no matter what I or McAffee say, simply for practical reasons. Based on gold’s history, Bitcoin already made it.
From the Bank of America, and Deutsche Bank to fintech giants such as PayPal and Bloomberg, Bitcoin is the part of the digital future that’s just around the corner, and the fact that the next block-reward halving is set to occur in May 2020, will make it even more of a rare asset, and naturally increase its price per piece.
Once again, you should consider that this comes from a Bitcoin minimalist that avoids it at all costs. Yet I cannot ignore its importance and uniqueness in an already thousand alternatives market.
In any case, I am not suggesting that you should invest in Bitcoin now but I do believe you should understand and acknowledge what makes it stand out from a utility perspective, regardless of its role in the public market.