Can Bitcoin really rise to $1 million?

As BTC continues to hit a record high of $93,000, the market value of Bitcoin has surpassed silver and ranked eighth in the global asset market value.

Data shows that the current market value of BTC is about $1.8 trillion. As Bitcoin continues to attract more capital inflows, some experts predict that its market value will continue to grow and may even further threaten the position of gold. If it rises 10 times to $1 million, it will surpass gold and become the world's largest asset.

Bitcoin is not only the first cryptocurrency to reach such a market value, but also marks the position of digital assets in the global asset landscape.

Cathie Wood, the boss of the US ARK Fund, has also repeatedly reiterated that she believes that the price of Bitcoin will reach $1 million one day.

She said her conclusion is based on the scarcity, security and increasing acceptance of Bitcoin in the investment community.

"Therefore, as institutions intervene, this scarcity value will significantly increase the price," she said, adding that the road to million-dollar tokens only requires a little more trust.

"Now, with the price of Bitcoin at around $90,000, it doesn't take much time for institutions to invest 2% to 5% of their asset allocation in Bitcoin, and we can easily achieve this goal." Matthew Sigel, head of digital asset research at VanEck, said that with the US debt reaching $35 trillion, if central banks use Bitcoin as a reserve asset, Bitcoin will reach $3 million by 2050. David Bailey, former cryptocurrency assistant to Trump Bailey believes that nation states are about to enter the Bitcoin market and predicts that sovereign funds and central banks will invest billions of dollars every month.

From traditional companies, they are allocating or planning to allocate Bitcoin.

On October 25, technology giant Microsoft said it was also considering whether to include Bitcoin on its balance sheet.

According to documents recently submitted to the U.S. Securities and Exchange Commission (SEC), Microsoft plans to invest 1% of its total assets in BTC and will vote on the "Evaluation of Investing in Bitcoin" proposal at the shareholders' meeting on December 10, 2024.

Even more aggressive about Bitcoin is MicroStrategy. As of November 10, 2024, the company and its subsidiaries held a total of approximately 279,420 Bitcoins, with a total purchase price of approximately US$11.9 billion and an average price of approximately US$42,692.

As of November 10, the return on Bitcoin held by MicroStrategy this year is 26.4%.

MicroStrategy has been buying and buying recently. Around November 10, 2024, the company purchased approximately 27,200 Bitcoins with approximately $2.03 billion in cash, including fees and expenses, with an average cost price of approximately $74,463.

Total ETF Bitcoin holdings worldwide

As of October 8, 2024, global BTC ETFs hold more than 1.1 million BTC (approximately $68.726 billion), accounting for 5.26% of the total supply

The next step is the national level

On August 2, Republican Wyoming Senator Cynthia Lummis formally submitted the Bitcoin Strategic Reserve Act.

The bill will instruct the U.S. government to establish a reserve fund for Bitcoin, a scarce decentralized asset, and plans to purchase 5% of the total supply of Bitcoin as a strategic reserve asset, that is, 1 million Bitcoins. Currently, there are only more than 2 million Bitcoins in circulation that can be traded.

This bill is still very likely to be passed after Trump takes office. Once it is passed, it will cause FOMO in Europe and other countries around the world, and they will rush to buy reserves.

Other supporters believe that the logic supporting Bitcoin to $1 million is this: large-scale over-issuance of legal tender will cause inflation, legal tender will depreciate, and people will flock to gold, Bitcoin, etc., because Bitcoin is easier to divide, carry, convenient for trading, storage, etc., so it will cause Bitcoin to soar to 1 million yuan.

If you don't hold gold, Bitcoin and other value-preserving assets, inflation will devour the purchasing power of legal tender in your hands. It's not Bitcoin that exploits you, but the over-issuance of legal tender that exploits you. Bitcoin just provides a new way to escape exploitation.

No matter what the rate is, Bitcoin will cause the largest wealth redistribution in human history, and no one can stay out of it, just like not buying a house in the past 20 years, it's very sad now.

For two people with the same work income, the asset size will be an order of magnitude different if they buy a house or not.

The essential reason for this gap is the seigniorage. my country's M2 has grown by 20% annually. In the past ten years, except for real estate, no other major asset class can continue to outperform inflation.

Therefore, not buying a house is equivalent to being levied a 20% seigniorage every year, while buying a house is equivalent to being exempted from the seigniorage tax.The reason to buy Bitcoin now is the same as buying a house ten years ago.

More and more foreign investors regard Bitcoin as the preferred asset for hedging and storing value, and it is no problem to outperform the world's average inflation rate.

Moreover, Bitcoin is still in its early stages, and the potential for network effects is very huge. The combination of these two factors makes Bitcoin's potential increase much greater than that of real estate ten years ago. The disadvantage is that it is very volatile, so you must have a good mentality, otherwise you will definitely not be able to resist.

If it reaches $1 million, even if the US reserve bill is not passed, then central banks of various countries will have to consider buying Bitcoin, including it in foreign exchange reserves, and may partially issue legal currency based on Bitcoin. Some people say that how can the central bank add fuel to the flames? Suppression is more like it, yes, it must be suppressed at the beginning.

However, there is a competitive relationship between central banks of various countries. If the central bank does not buy and the Federal Reserve buys, the Federal Reserve will take a big advantage. At that time, it will not be up to the central bank at all. At that time, people who hold Bitcoin will not only not have to pay seigniorage, but also share the seigniorage income with the central bank.

People who don't hold Bitcoin will have to continue to pay the seigniorage. The difference between holding Bitcoin and not holding Bitcoin will be much greater than the difference between having a house and not having one.

No one can escape the influence of Bitcoin, whether he is aware of it now or not. The only difference is whether he actively accepts it now or passively accepts it a few years later.