Why is Bitcoin so expensive?
Thats easy! There is a strong demand and a fixed supply of bitcoin 😜
Now the hard part! Why now? 🤔
There are many narratives when it comes to explaining why bitcoin is doing as well as it is.
- FOMO and Greed
- Disruptive technology
- Macroeconomic trends
First off, humans are greedy. You and I included - no exceptions. When we see others doing well we feel a strong pull to mimic their actions in the hopes of doing just as well or even better. This is also known as FOMO or Fear Of Missing Out. This strong emotion can cause many people to mimic actions that don’t make logical sense. We’ve seen this over and over again in all facets of life, but it is most evident in markets where there is a price and an easy way to measure success.
Disruptive technology is one of the core foundations for bitcoin’s price. Just like Tesla building electric cars, or Microsoft building computers, the Bitcoin network combines a distributed ledger, cryptography and cryptoeconomics in just the right way to create a useful technology. It allows people to transact value across the world without needing to trust another person, government or organization. In some sense it is also private and un-censorable - two features the market has been demanding for some time.
Lastly, macroeconomic trends have accelerated the need for a solution such as Bitcoin. Previous economic collapses, hyperinflation, and decades of poor economic policies even when well-intentioned was the fuel Satoshi Nakamoto needed. I don’t believe the US dollar will ever disappear even with concerns of devaluation being touted by the media. Too many banks rely on the US dollar and government control is unavoidable. Most likely CBDC will replace current government money. It’s better for governments.
If you combine all of these, you find a bitcoin price that seems absurd, but is backed by a real need, decades old.
Some would say that bitcoin’s price is only a leading metric of the real change that is still coming. The true mission of bitcoin, Satoshi, The DAO, and many of the cypherpunks past and present is to bank the unbanked. By this metric we are just barely getting started.
When moon? I don’t care. We should care more about the problems we’re trying to solve. Build more rather than trade more.
If you’ve forgotten that this is a movement. Here’s your wake up call 😁
Why is Bitcoin so expensive?