Bitcoin Supremacy

Share an interesting thought about how much Bitcoin can be worth in the long run....

Think of it this way. Bitcoin has gone from having no market value when it was launched in 2009… to being used in its first commercial exchange to buy two pizzas in 2010… through to today where it generates over $50 billion in daily transaction volume from every country in the world.

Over 100,000 merchants accept bitcoin as payment. That includes Overstock.com, Expedia, Microsoft, and Starbucks. Tesla began accepting it, before putting that on hold due to unfounded and hysterical "climate change" issues around bitcoin mining. But that won't last long. It was just a PR move.

The fact is that the number of businesses accepting bitcoin is rapidly growing. This is what the process of a new asset becoming money looks like, and it's just getting started.

People worldwide are spontaneously adopting bitcoin as money because of its superior monetary properties, primarily its hardness. [Ed note: Nick discussed this in part two of this interview series here.] I think it's clear we are still in the early days of bitcoin.

If bitcoin is going to compete with, and eventually overtake, government fiat currencies – which I believe it has an excellent chance of doing – its market cap must grow substantially.

If it were a government currency, bitcoin would be the 14th-largest currency by the market cap of its monetary base, ahead of the Russian ruble and just behind the Swiss franc. In other words, bitcoin is already bigger than most national currencies… and it's going to continue to grow.

Think of bitcoin's superior monetary qualities – namely its resistance to inflation by any third party – like a black hole sucking in capital from weaker currencies. Bitcoin is eating the demand for monetary goods from inferior forms of money, such as government fiat currencies.

I think this process will not only continue but accelerate exponentially in the years ahead.

Some proponents believe the endgame for bitcoin is to eventually emerge as the world's dominant form of money – a process called "hyperbitcoinization," or what I like to call the "Bitcoin Supremacy."

It's a global, voluntary transition from inferior money to a superior one.

If the Bitcoin Supremacy even comes close to happening – the case for which gets stronger every day – it would be the biggest transfer of wealth in human history.

To give you a comparison, if bitcoin's market cap rises to that of gold's – 10x from the current price – the price of a single bitcoin would be worth well over $400,000.

If that seems outrageous, consider how outrageous today's price of around $44,000 would have seemed to someone just four years ago when the price was about $4,300. I think that is the kind of upside – 10x returns – that we can reasonably expect in the next four years.

Looking farther ahead – say to the end of this decade – if bitcoin absorbs all the capital held in all the world's fiat currencies, a single bitcoin would be worth almost $2 million in purchasing power of today's dollar.

Now, I'm not saying that will definitely happen. But the chance of it occurring is also not zero… and is in fact growing every day. That's why I believe everybody should own at least a little bitcoin.