{"id":114766,"date":"2020-11-18T20:00:00","date_gmt":"2020-11-18T17:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/time-is-our-best-friend-bitcoins-12-month-trajectory-to-100k\/"},"modified":"2020-11-18T20:00:00","modified_gmt":"2020-11-18T17:00:00","slug":"time-is-our-best-friend-bitcoins-12-month-trajectory-to-100k","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/time-is-our-best-friend-bitcoins-12-month-trajectory-to-100k\/","title":{"rendered":"# Time is our best friend: Bitcoin\u2019s 12-month trajectory to $100K"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a41887d9e158\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a41887d9e158\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/time-is-our-best-friend-bitcoins-12-month-trajectory-to-100k\/#Bitcoin_is_a_store_of_value_and_a_potential_global_reserve_currency\" >Bitcoin is a store of value and a potential global reserve currency<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/time-is-our-best-friend-bitcoins-12-month-trajectory-to-100k\/#What_could_go_wrong\" >What could go wrong?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/time-is-our-best-friend-bitcoins-12-month-trajectory-to-100k\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Time is our best friend: Bitcoin\u2019s 12-month trajectory to $100K <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjAtMTEvZGE3ZDY2MmUtNGE2Ni00MDVhLWI0NWMtMjNkYjgxYjg3OThiLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-5a136f3a>Back in June, I wrote that Wall Street remaining on the sidelines is not necessarily bad for our industry. While most traditional investors are still observing, Bitcoin\u2019s (BTC) mainstream momentum has been building over the last four months. Currently, the Bitcoin price is hovering around $18,000, steadily <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roaching its historical all-time high.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Bitcoin_is_a_store_of_value_and_a_potential_global_reserve_currency\"><\/span>Bitcoin is a store of value and a potential global reserve currency<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>When we talk about asset valuation, the first step is always to understand the fundamental economics. Equities, bonds and real estate, for example, <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>ly derive value from generating cash flows. Therefore, valuation of these assets involves projecting future cash flows. Commodities, on the other hand, are more utility-based, so their prices are anchored by industrial supply and demand.<\/p>\n<p>So what is Bitcoin? Here\u2019s my take as a holder:<\/p>\n<ul>\n<li>Bitcoin is sound money and the first native internet money in human society.<\/li>\n<li>It is scarce (with a fixed supply of 21 million), durable (digital), accessible (blockchain is 24\/7), divisible (1 Bitcoin equals 100 million satoshis), verifiable (open-source Bitcoin core) and most importantly, censorship resistant (encrypted).<\/li>\n<li>With these superior monetary qualities in one asset, Bitcoin is a great store of value. Once it reaches a critical mass of adoption as a store of value, Bitcoin has huge potential to grow into a global reserve currency over time as well as a universal unit of account.<\/li>\n<\/ul>\n<p>History of money shows us that natural forms of money generally go through three phases of evolution \u2014 first as collectible (speculation on scarcity), second as investment (store of value), third as money (unit of account) and payment (medium of exchange).<\/p>\n<p>Between 2009 and 2018, Bitcoin was in its first \u201ccollectible\u201d phase. It was hard to estimate demand given the fickle nature of speculative trading, whose magnitude outweighed holders (mostly cypherpunks) who believed in Bitcoin as \u201cfuture sound money.\u201d The Bitcoin network also survived one of its most serious community divisions that led to the creation of Bitcoin Cash (BCH) in 2017.<\/p>\n<p>We are now in the early days of the \u201cinvestment\u201d phase. This year has brought us a global pandemic, continued uncertainty, unapologetic money printing, and in contrast, a successful third halving of the Bitcoin (as expected). For the first time since its inception, Bitcoin has <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/markets.businessinsider.com\/currencies\/news\/bitcoin-digital-gold-traditional-currency-5-yrs-billionaire-novogratz-2020-10-1029720375\">entered<\/a> the mainstream <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a> as \u201cdigital gold\u201d to hedge inflation risk. As more people start to embrace Bitcoin as a long-term wealth preservation mechanism, a simple supply-and-demand valuation framework becomes much easier.<\/p>\n<p>There are many factors that could add upside to Bitcoin\u2019s price in such a framework. Given that we are still in the early stage of mainstream adoption, I\u2019ll leave out most of them to be conservative and only focus on a highly likely scenario where 1%\u20132% of U.S. household wealth is allocated to Bitcoin, while Fidelity\u2019s most recent report actually recommends 5% target allocation.<\/p>\n<p>According to the United States Federal Reserve, U.S. household wealth <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.federalreserve.gov\/releases\/z1\/dataviz\/dfa\/distribute\/chart\/#range:2005.2,2020.2;quarter:123;series:Net%20worth;demographic:networth;population:all;units:levels\">reached<\/a> $112 trillion by June 2020. So, 1% to 2% of that would be $1.1 trillion to $2.2 trillion in potential demand. On the supply side, the current total circulating BTC is about 18.5 million. To keep it simple, let\u2019s assume the max supply of 21 million max is all up for sale. Demand divided by max supply \u2014 we get a price range of $56,000 to $112,000. Given current macro trends, it is not too crazy to expect this to play out in 2021.<\/p>\n<p>If we apply this math to $400 trillion global family wealth, <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.credit-suisse.com\/about-us\/en\/reports-research\/global-wealth-report.html\">according<\/a> to Credit Suisse\u2019s \u201cThe Global wealth report 2020,\u201d 1% to 2% global allocation could push the Bitcoin price to $228,000 to $456,000. Will this happen within 2021? Likely not. Can this happen in the coming decade? Highly possible.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_could_go_wrong\"><\/span>What could go wrong?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>It is prudent to play devil\u2019s advocate and assess downside risks too. Let\u2019s look at major risks that may derail a Bitcoin bull run.<\/p>\n<p><strong>Protocol risk.<\/strong> The biggest risk always comes from within. Bitcoin has inherent value only because it has the unique characteristics of \u201csound money\u201d \u2014 scarce, durable, accessible, divisible, verifiable and censorship-resistant. If any of those qualities are compromised, the foundation to its investment case will be eroded. Such protocol risks were high in its early years. After two major, controversial hard forks and three successful halvings, protocol-level risks seem to be contained now.<\/p>\n<p><strong>Political risk.<\/strong> Given that Bitcoin is positioned as the future of money, it is possible that sovereign governments ban it for fear of threatening fiat currencies. Such bans have already happened in several countries. However, given the lack of geopolitical homogeneity and increasing momentum of Bitcoin going mainstream, the risk of the cryptocurrency being banned out of existence diminishes with each passing day.<\/p>\n<p><strong>Adoption risk.<\/strong> This is a timing risk. It is quite possible that it may take much longer than expected for Bitcoin to go mainstream. Nevertheless, the unique quality of Bitcoin will speak for itself over time.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Bitcoin\u2019s price chart between 2017 and 2018 very much looked like a bubble. However, if we look at Bitcoin\u2019s full trading history, there is a clear upward trend together with a <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.blockchain.com\/charts\/n-unique-addresses\">growing<\/a> number of asset-holding addresses as well as the network\u2019s <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/www.blockchain.com\/charts\/hash-rate\">increasing<\/a> computing power. The <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/studio.glassnode.com\/metrics?a=BTC&amp;clid=00Q1I00000LtQY8UAN&amp;m=mining.HashRateMean&amp;mAvg=7&amp;mScl=lin&amp;pScl=lin&amp;resolution=24h&amp;s=1271620800&amp;u=1589403599&amp;utm_campaign=&amp;utm_medium=firstmover&amp;utm_source=newsletters&amp;zoom=\">increasing<\/a> mean hash rate of the Bitcoin network represents the increasing security level that one would want to see in a network where people\u2019s wealth is stored.<\/p>\n<p>On-chain analysis also <a rel=\"nofollow noopener noreferrer\" target=\"_blank\" href=\"https:\/\/studio.glassnode.com\/metrics?a=BTC&amp;m=addresses.ActiveCount\">shows<\/a> active addresses are still nowhere near the January 2018 level, even if the Bitcoin price is approaching its historical all-time-high. I may be on the bullish side for Bitcoin\u2019s 12-month price trajectory, but I truly believe that time will be our best friend.<\/p>\n<p class=\"post-content__disclaimer\"><em>This article does not contain investment advice or recommendations. Every investment and trading move involves risk, readers should conduct their own research when making a decision.<\/em><\/p>\n<p class=\"post-content__disclaimer\"><em>The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<div>\n<div style=\"background: rgb(239, 239, 239); border: 1px solid rgb(204, 204, 204); padding: 10px;\"><strong>Hong Fang<\/strong> is the CEO of OKCoin \u2014 a cryptocurrency exchange headquartered in San Francisco \u2014 and is the chief operating officer at OKGroup. Hong comes from a Wall Street background, having spent almost a decade at Goldman Sachs, where she focused on mergers and acquisitions, capital markets, investment, restructuring and various other corporate development activities for both traditional financial institutions and fintech companies. She is a graduate of Peking University in Beijing, China, and has an MBA in finance, accounting and entrepreneurship from the University of Chicago\u2019s Booth School of Business.<\/div>\n<\/div>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener noreferrer\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/time-is-our-best-friend-bitcoin-s-12-month-trajectory-to-100k\" target=\"_blank\" rel=\"noopener noreferrer\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Time is our best friend: Bitcoin\u2019s 12-month trajectory to $100K &#8221; Back in June, I wrote that Wall Street remaining on the sidelines is not necessarily bad for our industry. While most traditional investors are still observing, Bitcoin\u2019s (BTC) mainstream momentum has been building over the last four months. Currently, the Bitcoin price is&#8230;<\/p>\n","protected":false},"author":1,"featured_media":114767,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/s3.cointelegraph.com\/uploads\/2020-11\/da7d662e-4a66-405a-b45c-23db81b8798b.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74937,74863,75356,74355,73711],"class_list":["post-114766","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-price","tag-cryptocurrencies","tag-future-of-money","tag-adoption","tag-investments"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/114766","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=114766"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/114766\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/114767"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=114766"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=114766"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=114766"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}