Today I saw a news article:
On November 29, Russian President Putin officially signed a decree regulating digital currency taxation. The decree states that digital currency is officially recognized as a category of property!
This helps to understand the logic behind the 'bull market' in cryptocurrencies.
Before the Russia-Ukraine war, there were news reports of a large number of Russian billionaires having their assets frozen by Western banks. And before this, wealthy individuals from other countries had faced similar situations, such as in Libya, Ukraine, Iran, Iraq, etc. (specific data omitted here)
Therefore, the lessons from the past will definitely trigger international capital's concerns about financial hegemony. These wealthy individuals probably also realize that having a large number of overseas assets in Swiss banks or other Western banks carries a significant financial risk. Once a political crisis occurs, assets can be seized or frozen without warning.
But there is no such problem when it comes to cryptocurrencies.
Therefore, decentralized cryptocurrencies are very suitable as an allocation option for large assets to ensure the free disposal of assets globally.
So, if the global wealthy allocated a portion of their money to Bitcoin, how much would Bitcoin rise?
According to Forbes data for 2024, there are 2,781 billionaires globally, with a total wealth of $14.2 trillion. If 20% of their wealth is allocated to Bitcoin, the price of each Bitcoin would reach $140,000.
Whether Bitcoin is a risky investment or a safe-haven investment sometimes depends on how the investor made their money.
According to data, as of 2023, the total amount of money laundered globally each year accounts for about 5% of total GDP. With the global GDP at $126 trillion in 2023, the amount of circulating dirty money is approximately $6 trillion. This is just part of the calculable data.
In 2017, the International Consortium of Investigative Journalists also published the Pandora Papers: showing that offshore tax havens gathered up to $10 trillion in funds, and $10 trillion is still a conservative estimate.
It is well known that Bitcoin's second surge occurred in 2017, where the price skyrocketed from $1,000 to $20,000.
Perhaps the surge in Bitcoin is just a coincidence, but it does not prevent us from understanding the Pandora Papers of 2017 and what they involved:
Most of the data in the 'Pandora Papers' comes from Appleby, a legal service provider based in the Bermuda Islands, which mainly provides clients with offshore tax exemption services.
Then, nearly a hundred media outlets, including BBC and The Guardian, also participated in that investigation, with the German newspaper Süddeutsche Zeitung being the first to receive the news and then sharing it with other media through the International Consortium of Investigative Journalists.
The Pandora Papers revealed offshore financial transactions of over 120 political figures from about 50 countries, including Queen Elizabeth II, U.S. Secretary of Commerce Ross from the Trump administration, Trudeau's largest fundraiser Brownstein, former Canadian Senator Coderre, etc. It also highlighted the offshore tax avoidance actions of multinational corporations like Apple and Nike amounting to hundreds of millions of euros.
This incident has prompted governments and international organizations to further strengthen the regulatory efforts on offshore financial centers and multinational corporate tax planning.
Bitcoin is different; a multinational corporation or high-net-worth individual can easily transfer Bitcoin from one country to another, easily avoiding foreign exchange and tax regulations.
In fact, it's not just Bitcoin; all cryptocurrencies are the same. Mainstream cryptocurrencies exhibit a tendency for phase-based price stability.
It is said that Li Ka-shing acquired 20,000 Bitcoins in 2014, which today would be worth about 14 billion RMB, earning over 200 times profit; however, his investments in the UK have faced a loss of over 100 billion due to the depreciation of the pound and various market reasons, leading to a total asset evaporation of over 100 billion. Some media estimate that Li Ka-shing's calculable assets exceed 850 billion RMB. So, could the surge in Bitcoin be related to the wealthy's increase in safe-haven holdings?
However, conservatives like Buffett are almost cursing! Buffett emphasized at a shareholder meeting that even if Bitcoin were offered to him at a price of $25, he would absolutely not buy it! Because in his view, Bitcoin has no value and does not belong to productive assets.
Warren Buffett may criticize, but it does not hinder his indirect investment in cryptocurrencies. Berkshire Hathaway, under Buffett, invested in a cryptocurrency trading platform called Nubank. Based on the number of Bitcoins held by Nubank and Buffett's shareholding ratio, it is equivalent to Buffett indirectly holding 27 Bitcoins.
The foundation of currency is trust and consensus! The surge of Bitcoin today, driving a series of altcoins, is already a reflection of global investor behavioral consensus. It is said that the methods of getting rich are written in the (criminal law), just like the legends passed down through generations, distinguishing between the southern and northern schools. Explicit prohibitions cannot withstand over a decade of trading consensus, and what everyone generally recognizes is hard to shake. Thus, many predict Bitcoin will reach millions per coin!
(Data reference)
The extremist of Bitcoin—cannabis entrepreneur Jesse Myers once said: By 2030, Bitcoin could absorb 25% of global wealth, then the price of Bitcoin would exceed $10 million per coin. This is a relatively radical view.
The American investment company VanEck has also conducted valuations based on the extreme scenario of Bitcoin becoming a global reserve currency, believing that if Bitcoin becomes a global reserve currency, its price could reach as high as $4.8 million per coin.
The Chief Investment Officer of Bitwise Investments believes that Bitcoin could eventually approach a market value exceeding $11 trillion, and if Bitcoin rises 2230% from its current price, it could reach around $500,000 per coin.
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Others laugh at me for being too crazy, I laugh at them for not seeing through! Musk's choice to stand for Dogecoin is equivalent to having his own cryptocurrency bank. As for how to attract funds and expand the cake to compete with the Federal Reserve, it is evident that DOGE's efficiency department is one of his plans!
In forums, I have seen soft advertisements for PEPE coins, where some netizens questioned: DOGE has Musk behind it, who is behind PEPE? Indeed, to assess a coin's value, one must first look at who issued it.
Bitcoin is the ancestor of cryptocurrencies, with first movers holding a large amount of it, which in itself is a form of trust endorsement.
Other popular altcoins, such as Ethereum, are issued based on the Ethereum platform; Binance Coin is the exchange token for Binance; Ripple is issued by the American company Ripple; and the once-black swan LUNA coin was issued by the South Korean company Terraform Labs.
Therefore, judging risk probability based on the issuer's market value is also a good method.
