Bitcoin investment logic
Bitcoin and other digital currencies have become the hottest assets sought after by global investors. Personally, I believe that its rise is essentially a concern about the existing sovereign state's bottomless printing of money. It can also be understood as a countermeasure to the loss of control and inflation of the existing legal currency system. There is no doubt that it is one of the best global hard currency assets in the future. Its investment logic is summarized as follows:
1. Regulation. The main reason for the sudden popularity of digital currency is that the United States has changed its regulation by 180 degrees
2. Halving mechanism. The total number of bitcoins set by Satoshi Nakamoto (the technically automatically set limit) is 21 million. Currently, 19.6 million have been mined worldwide, and there are still 1.4 million to be mined in the next 130 years through the mechanism of "reducing production by half every 4 years" (behind which is Moore's Law causing less and less mining). Last year's global production was 13,000.
3. Supply and demand relationship. Judging from the public figures, the supply and demand of Bitcoin has been seriously unbalanced. The total amount of Bitcoin in the world is about 19.4 million (at least nearly 1 million have been lost for various reasons). At today's price, the total market value is 1.3 trillion US dollars, which is about 1/9 of the total market value of gold in the world.
4. Interest rate environment. The last halving in 2020 was the turning point of global interest rates from low to high, and this year is exactly the turning point of interest rates from high to low, which also adds new bullish factors to the bull market of digital currencies such as Bitcoin this year.
5. Market forces. The previous bull market was driven by individual investors in the currency circle scattered on different platforms around the world, while this time it was driven by institutional investors such as BlackRock and Morgan, global super giants, and other institutional investors. Next, Hong Kong, London, etc. will also launch Bitcoin and other digital currency ETFs.
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