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Can Bitcoin really reach $1 million? (And why did DOGE just facemelt with that pump?)

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Jordan
@writerjordan
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BTC is a great asset. It has defied all odds to come to where it is today. Even with basically no upgrades to its network, BTC has gone from 13k a few months ago to a high of over 63k this year, beating out all other large cap asset classes. While this performance is pretty awesome, it has led to some, er, weird speculation, with some people stating that Bitcoin could theoretically supersede 1 million dollars per Bitcoin.

I'm no pessimist, but I'm here to tell you why that isn't possible, most especially now. The thing that brings price up is just one thing: More buying! And more buying can either be facilitated by:

  1. More buyers
  2. Current buyers putting in more money

More buyers coming into the market is termed "new money", and new money comes due to an interest in the crypto market. However, most of them couldn't care less about "fundamentals" or "utility". They just buy something that they're either a. told to buy or
b. is super cheap and popular (like DOGE!) DOGE was already popular from the October 2020 TikTok pump, and now that it got in the news again, it pumped again!

This is the mentality of the average crypto noob. They don't really care about fundamentals, so they most likely won't buy bitcoin if they just want to get into the market.

Another factor is market cap. Market cap is simply total supply * underlying asset price. This implies that the price is directly proportional to the market cap, with the total supply being the constant of proportionality (quick maff)

This means that an increase in price will lead to an increase in market cap. But market cap can only theoretically increase to a certain degree. If Bitcoin reaches 1 million dollars, it's current market cap will be multiplied by 10, which will be bigger than a lot of blue chip companies. But the effect that would have on the entire crypto market will be to increase the TOTAL market cap to a point where it flips the stock market market cap. And the government surely won't allow that.

So the answer is simple: Bitcoin can and will reach 1 million, but not in the timeframe most people are looking at. It might take decades, but I strongly believe it would happen.

Just #hodl brah.

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