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This is definitely not investment advice - it is pure, idiotic speculation 😃
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As I gain more experience investing, I’ve started to change my thinking from “what price will this thing be” or “what direction will it go” to “what should the ratio of this thing be relative to other things be in the future”.
This way of thinking, I believe, cuts to the chase of what the future could actually look like without having to factor in inflation and without being held back by the human brain’s inability to think logarithmically.
First of all, as you’ll read below, I think it could be too late to get rich from Bitcoin. While I do think it’s possible for Bitcoin to hit $500k, or even $1.2M, I don’t think there’s a strong argument why it would go far beyond that (excluding inflation), and I think there are many arguments why it will take a long time to get there.
This means that in my view, a best case scenario is that Bitcoin 10x’s from the current $100k. Over what time horizon, I don’t know. But guess what? The S&P 500 did that over 2009-2024 as well. While I think Bitcoin has a place in my own portfolio, I think the reality is that to actually get rich, you’d need to invest in something that has a chance of 100x’ing or 1,000x’ing.
Don’t get me wrong - a 10x ROI is great! But if it takes 20 more years to get there? You may have been better off just investing in your own career or the stock market.
The main case for Bitcoin is that it’s digital gold, but cheaper to store and cheaper to transfer.
Personally, I agree with this thinking. I also believe that the risks behind both gold and Bitcoin are essentially the same (some form of “can be stolen/hacked” or “can be outlawed”) while the benefits are mostly the same as well, but Bitcoin is vastly easier to store and transfer than gold, making it theoretically superior.
| Risk | Drawback | Benefit | |
|---|---|---|---|
| Gold | - Can be stolen |
Side note: two other scenarios that I hear frequently about Bitcoin that I disagree with