What does Bitcoin need to hit $ 100,000?

Historically, the last quarter of the year is usually bullish. Which falls wonderfully for the price of Bitcoin because we have just broken the all-time high. That makes the target of $ 100,000 per unit for this year possible. Of course, making such predictions is never easy. But we can speculate. What do we need for Bitcoin to reach $ 100,000? Simple. We need demand.

The most popular forecast model in this area is probably the stock / flow model. This model uses Bitcoin’s supply and flow to predict its price and relies on scarcity as the primary source of value. In other words, Bitcoin is valuable because it is scarce. Which means that the rarer it is, the more valuable it is. It is evident that this model is inspired by the limit theory, which is very popular with conservative economists. Mind you, this theory is really brilliant. The problem is that any poorly implemented theory can become an extremely ineffective tool.

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What does Bitcoin need to hit $ 100,000?
What does Bitcoin need to hit $ 100,000?

How did it all start? First we have the dilemma of water and diamonds. Why is water, which is more important than diamonds to our survival, so much cheaper? In fact, water is very important. But its abundance lowers its price. Diamonds, on the other hand, are a rather scarce resource and tend to have a high price. In other words, scarcity is more important than utility. If utility were more important, since water is more useful, it would have a better price. However, this is not the case.

There is no question of demand in the stock / flow model. In other words, the demand is completely ignored. Only the number of units in circulation and the inflow of new currencies are taken into account. Interestingly, this flow is referred to as “inflation” in terms of supply. Which is frankly absurd. Then sentences like this can be heard: “After the halving, Bitcoin will have lower inflation than the inflation of gold”. Obviously you are getting confused here – Emissionâ ???? by â ???? Inflationâ ????. Which in turn shows the great misunderstanding that exists in all of this. The stock / flow model is a model made up of dogmas. It’s not a model built from evidence.

What is bitcoin Bitcoin is primarily a code on a computer network. Well, it’s actually a code listing. These codes are used to represent an exchange rate. The word â ???? Exchangeâ ???? denotes the presence of two elements. Suppose we are on a desert island with a wallet full of bitcoin. We have the code. But we are alone. Which means that the exchange is not possible. That means there is no market. In other words, the Bitcoin rate is $ 0. However, the stock / flow model tells us something completely different. This model would examine supply and flow to predict price. In this case, depending on the model, the price would go through the roof. In practice, however, the model would raise highly unrealistic expectations.

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Like it or not, the price of Bitcoin is directly related to the dollar. The BTC / dollar is definitely the most important pair. Which implies that the price of Bitcoin requires capital to rise. Hence, a loose monetary policy is much better than a tight monetary policy for the Bitcoin price. A high level of liquidity has a positive effect on the price. And reducing the amount of money is harmful. A strong dollar lowers the price. And a weaker dollar increases the price. All of this has to do with investor sentiment. An optimistic investor takes risks in his investments. A pessimistic investor avoids risk and does not spend his capital.

Why so much fuss lately? While it’s true that the Federal Reserve announced a gradual reduction in incentives due to economic overheating, corporate earnings have been better than expected. I mean, companies make money. There is growth. A restoration is in progress. Production and sales losses are significant. And inflation is extremely worrying, but the economy is recovering. This growth leads to optimism. In other words, investors believe in the future and look for ways to invest their capital.

The rise in the price of Bitcoin is a defeat for the pessimists. People don’t buy Bitcoin because they think things are wrong. But on the contrary. We buy because they think things are going well. Obviously there are problems. However, it is believed that these issues are temporary. It is invested today because it is assumed that we will be better tomorrow.

What does Bitcoin need to hit $ 100,000? Requirement. And this demand will depend on the economic strength of the next few months. In the technology area in particular, we have to be very aware. The sector â ???? Growthâ ???? it is much more speculative than the value sector. A shift into the value sector is common in a conservative market. And conservatism isn’t ideal for Bitcoin. We need a risk tolerant market. And that is possible in times of great economic optimism.

November and December are key months. These are months of economic activity. Consumption generates income. And income stimulates investment. That is exactly what is needed. An optimistic investor who is ready to invest because he believes in the future. The conditions are in place for Bitcoin to reach $ 100,000 this year. It is not save. But the probability is on the table.

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