What is the basis for Bitcoin’s market value to rise to 3.3 trillion?

Bitcoin’s new turning point

Yesterday, I used the article "How high can Bitcoin rise after the US approves ETF?" to answer the question of a group member: What is the impact of Bitcoin ETF on Bitcoin's trend? In general, ETF has fundamentally changed the status of Bitcoin and is the third historical turning point of Bitcoin. The first turning point of Bitcoin was when Laszlo, the pizza guy, bought two pizzas with 10,000 Bitcoins, completing the thrilling jump of Bitcoin from air to commodity. The second time was when Mentougou Exchange traded Bitcoin for the first time, completing the historic leap of Bitcoin as a trading medium, and Bitcoin rose 100 times from the opening price in just 4 months. Why is ETF the third historical turning point? The approval of Bitcoin ETF means that Bitcoin has been recognized by the mainstream capital system. Although it is a belated positive, and although I don't like Gary Gensler's procrastination, the US Securities and Exchange Commission led by him and he himself will be recorded in the history of Bitcoin development forever, because they have pushed mankind towards the right financial path. This is a major long-term positive that affects the fate of mankind. Positive factors are divided into long-term positive factors and short-term positive factors. The impact of long-term positive factors is calculated on an annual basis. It is not one year, nor two years. It has fundamentally changed the development trajectory of Bitcoin. Bitcoin has left the small pond, jumped over the dragon gate, and returned to the sea.

The following is a further answer to the question from the group members: "After the US approves the ETF, how high can Bitcoin rise?"

“Can you explain it more clearly, when was the lowest point, how much was it, when was the highest point, how long is a cycle, and what is the basis for the prediction of Bitcoin’s market value of 3.3 trillion?”

ETF plays a decisive role in the rise of Bitcoin

The volume of ETF funds has played a decisive role in the rise of Bitcoin. For a long time, Bitcoin has to depend on Wall Street. The article "How high can Bitcoin rise after the US approves ETFs?" introduces the factors and basis for the rise of Bitcoin, which will not be repeated in this article.

Bitcoin has a halving cycle every four years. Each halving reduces the supply by half. Under the condition that demand remains unchanged, it will inevitably rise. The lowest point of this cycle is $16,000, which will appear in December 2022. Some people have summarized that Bitcoin has a cyclical effect of 10 times increase. According to this, the high point is $160,000, and the difference between the high and low points of the previous cycle is 8 times. Bitcoin generally has a bull market of more than one year and a bear market of more than two years. It starts to rise a few months before the halving, reaches a high point in half a year to eight months after the halving, and then it is a bear market. These experiences are invalid in front of ETFs. I wrote an article in the past predicting that without ETFs, it would not even pass 69,000. Now the demand is different. The characteristics of ETFs are similar to bonds. The market funds are about 200 trillion. If 1% of the funds enter Bitcoin, it will explode. The mainstream market funds have only entered for 40 days, and the trend is not visible yet, and even gods cannot predict it.

All Bitcoin operation experience is unreliable

ETFs fundamentally change the technical trend of Bitcoin. All existing experience needs to be revised. There will definitely be a big rise, but not necessarily a big fall, because your opponent is the big sharks on Wall Street. The big fish eat the small fish is the unchanging logic of the capital market. When you can't see the future trend clearly, holding the currency is the best strategy.

If we have to speculate, we must make assumptions. Based on the data of the first 40 days, assuming that the inflow remains unchanged, the average daily inflow of ETFs is 800 million, the annual inflow is 292 billion, and the inflow of stablecoins is 29.2 billion. The sum of the two is 321.2 billion. There are less than three months before the halving. The Bitcoin hoarding has not moved for a year, reaching 70%. That is, assuming that 30% of it is fully changed hands, 321.2 billion can leverage a market value of 1 trillion. The price of the currency at this time is more than 100,000 US dollars per coin, which is a conservative estimate. In the last cycle, Bitcoin halved, and there was no 10-fold funding support in this round, and it rose 8 times. So this round of 10-fold effect should appear, and it will exceed, long-term positive decisions, and it will rise to you. Will it continue to rise?

The basis for the increase to 3.3 trillion

Simply put, the market value of Bitcoin at $3.3 trillion is calculated based on the unit price of Bitcoin, which is $160,000, multiplied by 21 million Bitcoins. As mentioned earlier, ETFs are a long-term positive. In the past, after Bitcoin was hyped up, the subsequent funds could not keep up, so it would inevitably fall to digest the hyped-up bubble and then slowly rise from the bottom. This time, the influx of ETF funds in the first 40 days was 10 times that of USDT. A simple estimate is that the digestion capacity is 10 times greater. In particular, ETFs are a long-term positive, which will change the original bull-bear time ratio of Bitcoin's rise. The bull market has no top, and Bitcoin has no top. How long will this crazy bull market last? This is what we need to judge. How to judge? We still need to go back to the analysis of the main funds. Once Wall Street made a move, the original Bitcoin trading crocodiles became small shrimps. In their view, the main funds determine the time of the rising cycle and the top of Bitcoin. The main funds believe that Bitcoin is a stored value asset. It is a reasonable estimate that Bitcoin can occupy the second place in the stored value asset, and it is unimaginable to replace gold. When it reaches the second place, there will be differences on Wall Street, and then the stage top of Bitcoin will appear. At this time, the market value of Bitcoin is around 3.3 trillion, which matches its status as the second largest store of value.

In just two days, the price of Bitcoin soared from 52,000 USDT to a maximum of 64,000 USDT, an increase of $10,000. At the same time, the market value of Bitcoin reached 1.225 trillion US dollars, which is close to the market value of silver (1.277 trillion US dollars).

How to get returns comparable to Bitcoin in those days

If Bitcoin rises again and surpasses gold, it will need a new narrative, further innovation, and be linked to daily payments, that is, the realization of the Bitcoin standard is needed to realize the Hal Finney conjecture: $10 million per Bitcoin. This idea has already taken shape in 2023. The Bitcoin standard is a reflection of the dual-track currency system. It means that the legal currency standard and the Bitcoin standard develop in parallel and compete with each other. For the principle of the Bitcoin standard, please refer to the "Realization of the DW20 Decentralized Standard Currency" on the chainless website (chainless.hk). Simply put, it is to equip Bitcoin with a ruler, use Bitcoin to measure global economic development, and use DW20 to replace stablecoins for daily transactions. Bitcoin and DW20 together constitute a non-inflationary Bitcoin standard system. The issuance principle of DW20 is the same as Bitcoin, and it also requires a process from air to asset currency (stablecoin). The difference is that DW20 adopts an unconditional airdrop method, and anyone who registers and certifies can receive it without any fees. The process from air to assets is a process of huge profits, comparable to the huge wealth of Bitcoin mining in the early years.