RE: Was $42,000 the Peak for Bitcoin? Crypto Bull Market Over?
The world really needs a more reliable store of value than anything in existence today, but then again, a fundamental truth about the world is that everything degrades. What follows from that is that a perfect store of value can only exist insofar as people other than its owners are imposed an obligation to compensate for the inevitable loss of value over time. That is the only way a static store of value can maintain all of its value over long periods of time.
In my opinion, a healthy situation is such that a small loss of maybe one to two percent is incurred annually when holding a store of value asset. A healthy civilization is in a continual process of building and renewing itself.
Bitcoin will continue to appreciate by leaps and bounds in the near future only because it's in its infancy in terms of adoption.
But I do not share the wild fantasies of Bitcoin maximalists who think Bitcoin will eventually subsume all value. What it will end up as in is a store of value asset owned by major corporations, governments and central banks who need store of value assets as a source of stability. Its value will be vastly larger than it is today. It will eat precious metals for breakfast and suck much of the store of value component from things like real estate. As a store of value asset Bitcoin is superb as it has a hard supply cap and because its completely immune to depreciation by technological innovation. Its core property is synthetic scarcity which is what it implements as well as it is necessary to implement.
The world will come to see the value of Bitcoin in the coming decades. Humanity used to have reliable stores of value in the past but even things like real estate are ultimately subject to the whims of humans as alterations in zoning bylaws can drastically alter the value of any piece of real estate. Gold is probably the most reliable store of value at the moment but it, too, will not probably stand the test of much more time when human civilization expands beyond the limits of the Earth and starts making full use of all the resources in the solar system.
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