The storm is coming

Ten coins can be called a marquis

128 days ago, I released a video about Bitcoin halving, predicting that the price of the currency would rise to US$55,000 after the halving.

That day was April 17, 2020, and the closing price of Bitcoin was $7,125.

A few years later, the halving will happen again soon, to be precise, it will occur at some point in April or May 2024.

This is the fourth halving in the history of Bitcoin, and it is also the last chance for ordinary investors, just like the entrance of an ancient city wall under the setting sun, with only a thumb-thick crack left. When this door closes, the last chance to get on the train will also disappear.

Xiao Feng's biggest regret back then was that he was unable to save Ah Zhu. "I am a Khitan, what great ambitions can I have?"

Once the golden bottle falls into the well, there is no turning back.

My biggest regret is that I have been focusing on entrepreneurship for nearly ten years, but I haven’t accumulated enough coins yet, and the game is about to end. This is also a kind of fate.

How to define scarcity

An Arab scholar, Seifdeen Amos, wrote a book called "Bitcoin Standard" in 2018. In this book, he talked about a "stock-output" model. Simply put, it is the relationship between inventory and annual output.

When we say inventory, we are counting the total quantity of a commodity.

Annual output is the total amount of this commodity produced in one year.

Dividing the two, we get a ratio called SF.

In the picture, you can see that the SF of gold is 62, and that of silver is 22. What does this mean? It means that it will take you 62 years to produce the same amount of gold as now, 22 years for silver, and 0.4 years for platinum, which all indicate one thing: they are extremely scarce.

We began to wonder, are these things becoming money because they are scarce? In contrast, platinum and palladium have SF values ​​equal to or less than 1, which means they are not that scarce.

This is indeed the case. Gold has a better preservation value than any other metal in the world.

The SF values ​​of the goods we use in our daily lives, such as food, mobile phones, computers, and cars, are far less than 1, which means that they have never been scarce. Why? Because as long as someone wants a product, you can produce it. Once someone wants to stock up, the price will rise, and more companies will produce it. The price will definitely fall.

This is common sense about supply and demand balance.

Then we can easily draw a conclusion that if the SF of a commodity is higher, then it can better maintain its value and will not be diluted.

Look at gold. In 1972, it was $46 an ounce. In 2020, it reached a new high of $1,744 an ounce, a total increase of 37.9 times. So why don't we produce more gold to meet the demand? The reason is that the amount of gold mined is limited by mining technology and cost. If you spend more on something than you earn in the end, you will definitely not do it.

So, what is the SF value of Bitcoin? 19.5 million Bitcoins have been mined in the world. However, a research report says that in fact, more than 1.6 million of these 19.5 million Bitcoins have been permanently lost.

Therefore, there are only about 17.9 million bitcoins that can actually be used. Based on the current annual production of bitcoin, its SF is about 54, which is similar to gold.

In a few months, Bitcoin's SF will rise to 108, and the annual inflation will be only about 0.9%, which means that Bitcoin has become the most scarce asset in human history since gold.

Halving is the underlying reason for changing the supply relationship of Bitcoin, not anything else.

And this supply relationship determines the price of the currency.

Some people get excited when they hear about Bitcoin ETF, as if the price of the currency will skyrocket as long as it is approved.

I suggest you not to look at the media hype headlines, but look at the essence.

It doesn’t matter whether the BlackRock Bitcoin ETF is approved or not, and it doesn’t matter when it is approved.

What is important is that the expectation of "Bitcoin ETF approval" will serve as bait to mobilize market confidence, which will gradually form potential energy and unknowingly push the currency price to more than $45K in the future.

You thought we were still in a bear market, but in fact the bear market ended quietly without you knowing it.

And this potential energy will continue, it is not the water pipe in your home.

BlackRock and the ETFs that were subsequently approved are like the Suez Canal (Arabic: ), connecting old money and new pools. The volume of these insurance funds from traditional finance is larger than many people imagine. Bitcoin is not too expensive for them, but too cheap and the plate is too small.

The Suez Canal connects the north-south two-way water transport between Europe and Asia. From then on, ships no longer had to go around the Cape of Good Hope at the southern tip of Africa. Fleets departed from London, England or Marseille, France, and sailed to Mumbai, India, returning with gold, silk and spices.

Darius I, King of the Persian Empire, completed the last section of the Suez Canal in 500 BC. He erected a granite stele in one of the river basins, which read:

I am a Persian, I started from Persia and conquered Egypt. I ordered this river to be opened, starting from the Nile and flowing through Egypt, and ending at the vast sea near Persia. Once this river is completed, Egyptian ships can follow it directly to Persia, which is what I want.

Cool, crazy and awesome, this is the charm of the channel.

The passage of the Bitcoin ETF will not affect the present, but the next decade or so. Once the channels for the entry and exit of legal currency are unimpeded, the rest will be left to time.

By 2025, perhaps we will really see Bitcoin at $100K+.

Bitcoin has gradually evolved into the land of Manhattan and become a marker of social class. People choose Bitcoin not because it transfers money faster than other currencies, but because it is expensive.

It is expensive because it embodies the core consensus of the entire crypto game. As a vehicle for storing value and as an object of show-off in social relations, it is sought after by everyone.

Bitcoin demonstrates your strength, your stability, your loyalty and your faith. It is your courtyard house within the Second Ring Road in Beijing, your old house on Hengshan Road in Shanghai, and your villa in Mid-Levels in Hong Kong.

Its value is determined by the wealthy class who have real purchasing power, just like Berkshire Hathaway's Class A shares are as high as US$530,000 each. Funds are flocking to it and it is always prosperous, but it is extremely difficult for retail investors to even buy one share. So what?

Ten coins can be called a marquis.

Price Anchoring Game

If a person does not understand how the price of the currency is anchored, he or she does not truly understand Bitcoin.

Let me talk about land first, and then return to Bitcoin.

I think everyone has played Monopoly, but I rarely see anyone express its essence.

You have to understand that the role of the Federal Reserve is similar to that of the bank in the board game Monopoly. Its goal is not to win, but to provide enough funds to keep the game going.

For the Federal Reserve, the appropriate amount of assets is the amount that best enables it to fulfill its responsibilities.

Monopoly is actually a land speculation game. The core is to monopolize resources. There is only one winner at the end of the game, and the other players are buried with him.

Victory does not come from competition, but from monopoly.

Question: Where does the financial revenue of a central empire come from?

Answer: It is no different from Monopoly, except that:

State-owned enterprises

Publicly owned land

Monopoly financial system

For a centralized government, this game only cares about two things:

1) How to use a top-down bureaucratic system to control the entire society;

2) How to feed this bureaucratic system through commissions from land, taxation and financial systems.

Countries all over the world are similar, with little difference between ancient and modern times, China and foreign countries.

Take the Tang Dynasty as an example. The government implemented the equal-field system. Every male born was given 80 mu of public land and 20 mu of permanent land (private land). When a man reached adulthood, he would reclaim wasteland, pay taxes, and perform labor service. Every year, the harvest would be handed over to the government in proportion. After his death, the farmland would be reclaimed. At the same time, the emperor also allowed local governments and government offices to own commercial land and funds.

The system eventually broke down as land became increasingly concentrated in the hands of powerful bureaucrats and aristocrats.

For example, during the reign of Emperor Gaozong of Tang, a man named Wang Fangyi owned a lot of land, probably dozens of hectares. During the reign of Emperor Zhongzong of Tang, Princess Taiping owned a lot of land, all over fertile areas. These lands were rented to poor farmers for cultivation, and most of the harvest was given to the rich and powerful. The government would also take another levy. Many people hid in the countryside to escape hard labor. The government first registered the names of these fugitives in a book, and later simply ordered the fugitives to pay taxes. They either sold their land and houses, or sold them to their neighbors, and the cycle continued until there was no escape.

What if you lose the game? Play another round.

Therefore, dynasties changed, peasants revolted, and resources were redistributed.

The same is true in modern times. The asset values ​​advocated by East Asian countries are mostly tied to land. This is the rule of the game set by the government, and the carrier is the house.

The United States advocates capital efficiency, so the national game they play is the stock market, and the purchasing power represented by the national 401K pension is the reservoir.

These are all different price-anchored games, and there are countless similar copies scattered around the world, such as Rolex, Hermès Birkin bags, Yu-Gi-Oh cards, limited edition blind box figures...

New York, USA, is quite developed and has a high building density, right?

However, there are still more than 25,000 pieces of idle and underutilized land. A full 25,000 pieces (the light-colored ones in the picture are vacant land).

There is even a proposal to impose a 3.5% tax on these lands, which would bring in an additional $429.9 million in revenue for the city.

Beijing, the most densely populated city in northern China, has a jurisdiction area of ​​16,000 square kilometers, of which only 2,000 square kilometers are actually built-up areas, and the land development rate is only 12.5%, which is even more stingy than Hong Kong (25%).

It is actually very easy for Beijing to have a large villa per capita. According to China's planning standard of 10,000 people per square kilometer, the city can accommodate 160 million people after it is fully developed.

If this is the case, why don’t these governments open their buildings to provide shelter for the poor people in the world?

Because in this game, land is a means of production, and the monopolist must maintain its scarcity in order to keep the game going.

What is price anchoring? This is called price anchoring.

To win, you must understand Bitcoin’s place in the crypto game…