Blogs & Articles: 3 Reasons Why It’s Not Too Late to Buy Bitcoin 🔗 3 years ago

Really, it’s not.

I hear it all the time: it’s too late to buy Bitcoin! It seems that everybody thinks that because Bitcoin’s price is around $50,000 USD, they’ve missed the boat. While it’s true they might have missed part of the ride, it is certainly not “too late” to buy Bitcoin. In fact, we’re still very early in this new era of digital money. So, if you’re struggling with sticker shock, here are 3 reasons why you should consider buying some Bitcoin today, especially when looking out over the next several years.

1. A price of $50,000 USD for 1 BTC is purely arbitrary. Just as $3,000 for 1 share of Amazon equity is arbitrary, so is $50,000 for 1 Bitcoin. Total market value, or market capitalization (market cap), is the number that most matters. For example, Bitcoin’s market cap is slightly under $1 trillion, and Amazon’s market cap is about $1.7 trillion. These numbers tell us that the total market value of Amazon is almost double that of Bitcoin, but if you were to look at the price for a single unit, you might be led to think that Bitcoin is “15 times more expensive” than Amazon.

A quick look at market cap corrects that line of thinking. When examining Bitcoin’s $1 trillion market cap, we can see how small it is relative to the market caps of leading tech companies like Amazon, Apple, and Alphabet (all in the $1–2 trillion range), to the total market value of above-ground gold (approximately $10 trillion), and to the size of the world’s bond market (greater than $100 trillion). Bitcoin is objectively small, even though its price might feel out of reach to the average investor.

Thankfully, Bitcoin has a subunit, called sats. One sat is equivalent to 0.00000001 BTC. Said another way, $1 buys you ~2,000 sats today, and you can choose to buy just 2,000 sats! There is no minimum to the amount you can acquire (but remember, there is a maximum). See how arbitrary units can be? So be sure to think in market caps for a clearer look at Bitcoin’s value relative to other assets.

2. If you consider the potential market cap of Bitcoin, you’re actually in early. Bitcoin’s potential market cap is at least the size of the gold market, about $10 trillion. This would put the price of 1 BTC at about $500,000. Gold remains a non-government money demanded by the market, as thousands of years of human infatuation with the precious metal haven’t dissipated despite its removal from the monetary system a half century ago. And Bitcoin, modeled after gold by creator Satoshi Nakamoto, has already captured 10% of gold’s market cap in only a dozen years.

The astounding ascent of Bitcoin relative to gold foreshadows a permanent global shift in preference from precious metals to precious numbers. In addition to being a virtual commodity, Bitcoin also derives value from its properties as a currency, as a settlement network, and, mostly uniquely, as a new social construct and source of truth in the digital world. These properties are impossible to quantify and contribute to my claim that gold’s market cap is merely a beginning target for Bitcoin’s ultimate value.

3. Bitcoin is only 12 years old! The internet is roughly 40 years old and still swallowing entire industries without any signs of stopping. Netflix, Expedia, and file-sharing protocols disrupting cable TV, travel agencies, and the music industry are only 3 examples in a list of thousands of industries either rocked or altogether assassinated by it. Bitcoin is certainly an extension of this long-standing trend, and it has already caused some of the world’s most important institutions such as the Federal Reserve, European Central Bank, and People’s Bank of China to come up with their own digital currencies as a response.

To think that you might be late to buy Bitcoin is to think we are near the end of this monetary revolution when, in fact, it’s just barely underway. Yes, the incredible volatility of Bitcoin’s price means that buying today could easily be followed by a 50% price drop next week. But this type of short-term thinking prevents many from seeing the more important and lasting monetary changes occurring, due to both the fragility of the dollar-based financial system and the rise of currencies enforced not by governments.

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Now, why not forgo your daily $5 latte today and become the proud owner of 10,000+ sats? And tomorrow, 10,000+ more?

What are your thoughts? Leave a comment below!

-Nik Bhatia, author of Layered Money: From Gold and Dollars to Bitcoin and Central Bank Digital Currencies (now available on Audible)

Author’s opinion only. The views and opinions expressed in this article are those of the author and do not necessarily reflect the position of Tantra Labs Inc. or any other company. Examples of analysis performed within this article are only examples. They should not be utilized in real-world investment decisions as they are based only on very limited information. Assumptions made within the analysis are not reflective of the position of Tantra or any company.

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