Project Summary: Bitcoin was created in 2009 as the world’s first decentralized, digitally native, non-sovereign currency. Rather than utilizing a third party intermediary such as a bank, transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. It can be used as a medium of exchange for goods and services, as well as a store of value - or digital Gold - due to it’s limited, fixed supply of 21 million Bitcoins.
Rating: BUY
Price Target: $100,000
Adoption Score (1-100): 70
Thesis:
According to a recent study, only about 1.3% of the world’s population currently owns Bitcoin.
Over the next few years, we are likely to encounter a number of mainstream growth catalysts, each attracting millions of new individuals to Bitcoin, both actively and passively, and pushing the price to new highs.
Here’s what they may look like:
1. Massive Wall Street inflows have only just begun (i.e. Hedge Funds, Brokerages, Sovereign Wealth Funds, Pension Funds)
2. Purchased and held by nation-states, Fortune 500 companies, and investment funds catering to ultra-high net worth individuals as both an investment and as a hedge against the weakening $USD.
3. Regionalized adoption by citizens due to poor monetary policy or geopolitical conflict (i.e. Argentina; Hong Kong; Nigeria)
4. Traditional brokerages including Fidelity offering cryptocurrency and ancillary products such as a Bitcoin ETF.
5. FOMO — retail investors will continue to pile in as the price increases out of a Fear of Missing Out.
6. Sweeping regulation to further protect investors and build investor confidence in rapidly evolving market.
7. Supply shock — global demand will outweigh total supply (21,000,000 Bitcoin) as corporations and individuals store their Bitcoin long term, causing further price surges.
If these catalysts come to fruition, Bitcoin’s 4th adoption cycle will likely culminate in the next 1-3 years between $100,000–$200,000 — or a $2 trillion to $4 trillion market capitalization.
It just seems logical for the only digitally-native, borderless currency, to capture a mere 2% share of the global monetary supply ($2 trillion). Especially in an ever-digitizing, ever-globalizing economy.
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The views above are opinions of the author and not to be taken as investment advice.