Stack Your Sats, Bitcoin Scarcity Kicking in at a Rapid Pace With 2020 BTC Halving Coming Up
Being one of the scarcest assets in the world, Bitcoin is far more valuable to hold over the years than to spend it.
There could only be a fixed hard limit of 21 million Bitcoin in existence ever. As a matter of fact, millions of Bitcoin have been actually lost forever that further put pressure on this already finite limit.
Per economic and psychological factor, a limited supply of an asset with a high demand results in an increase in the value of the asset.
Bitcoin is one of the scarcest assets in the world and eventually every human will want one.
— Pomp 🌪 (@APompliano) June 26, 2019
Everyone wants a piece of bitcoin but not everyone can
Now, with the third Bitcoin reward halving coming in May 2020, Bitcoin production would be further reduced and only 594,488 BTC will be minted before this event. Once all 21 million are mined, the actual number to be much lower due to them being stolen and lost, Bitcoin would become even more scarce.
Even at 21 million, there aren’t enough of Bitcoin fragments for people to hodl. Twitter founder, Jack Dorsey’s Cash app is already absorbing 10% of the daily Bitcoin supply while Grayscale Bitcoin trust (GBTC) is buying up about 21 percent of newly mined BTC supply for its investors.
This means even less BTC for the general public.
This scarcity is the reason gold is a valuable asset. Just like gold, Bitcoin is scarce, could be even more so as space mining gets into the picture. Applying the stock-to-flow model to the leading cryptocurrency, in the next few years, BTC would hit a high a trillion dollars in market capitalization, reaching to gold’s $7.5 market cap level.
Bitcoin or Gold
Bitcoin and gold have some resemblances in the manner both have finite resources and require mining. While the yellow metal already serves as a store of value, digital gold is working towards becoming one.
However, Bitcoin still trumps gold in certain areas. Not only the world’s top cryptocurrency can act as a store of value but also a medium of exchange that can also have a payment solution built on top its blockchain.
Unlike gold, Bitcoin is also portable, verifiable, censorship-resistant, and un-confiscatable.
However, gold has far more utility such as jewelry and can also be used as a conductor of energy among other industries.
₿ – An Essential Part of your Portfolio
If an investor allocated 2% of his portfolio to #bitcoin, this TINY allocation would have added 400bp to his overall return. WOW 😲
Hence, we advise to allocate 1-2% to crypto.
— Thomas Lee (@fundstrat) June 24, 2019
The world’s top cryptocurrency has already gone through three bull cycles and we are on our fourth one that has us up 200 percent in 2019 till date.
Have you stacked your sats for this bull run?