Bitcoin hit another all time high today, breezing past $5000 all the way to $5200 while pulling back a bit as I write this post, which has many scratching their heads as to why. Even people in the crypto community don’t seem to understand why bitcoin keeps going up when many other coins have a lot of extra features and added properties. There is one simple thing people don’t understand and that is even if bitcoin did nothing but act as a good store of value, it would be worth a massive amount of money.
Right now the market cap is miniscule compared to the amount of money in the investment world that is simply looking for a store of value. Bonds, TIPs , gold and Tbills all try to do something which is simply to counteract inflation, and in many cases they fall short due to flaws. This has people with more money than you and I can imagine, spending hundreds of millions on paintings, fine wines, collectable cars, ect. Simply because they have so much money they cant find enough places to store it.
When you are that rich the stock market and real estate aren’t enough to diversify your risk and having a way to store value and keep it off the grid is a real benefit. One of the next big moves forward for bitcoin will be truly anonymous use and its being worked on as we speak. Any time you give someone the ability to purchase assets off the grid that can be used anonymously to purchase other items and act simply as a store of value, you have a triple threat.
An anonymous spendable store of value is the holy grail when it comes to what many people who hide their money want. It has been a goal that people have tried to achieve for as long as taxes have existed and we have a real shot at it becoming a reality in the next 5 or so years. There is so much money looking to be hidden and the market cap of bitcoin and crypto currency is so tiny in the grand scheme of things , that one big actor could move the entire market.
Not one single big actor is coming though, many are and they are going to flood through the gate. The signs are on the wall, big money is coming and if that happens the price is going to levels that many thought would be unreachable for a very long time if ever. There are ways to hurt bitcoin in the short term, but in the long term its simple value proposition of a good store of value is extremely attractive to many people.
Thanks to @Elyaque for the badges