The Surprising Reason Why Bitcoin Could Finally Reach $1 Million

The Surprising Reason Why Bitcoin Could Finally Reach $1 Million

Back in April, legendary investor Cathy Wood of Ark Invest captured the capital of the cryptocurrency world with breathtaking enthusiasm. Bitcoin (BTC 1.43%) Expected price of 1 million dollars. That was, of course, before the market crash. Now, six months later, Ark Invest has reiterated its $1 million price target for Bitcoin. After running the numbers, the investment firm concluded that the three primary use cases for bitcoin support a future market capitalization of $28 trillion, or more than $1 million per bitcoin.

What’s really mind-blowing about these accounts is that the team at Ark Invest hit the market cap figure of $28 trillion by adding a new use case for Bitcoin: As an “insurance policy against arbitrary seizure of assets”. This likely points to the concerns that many libertarian Bitcoin proponents have about governments in general. Ark Invest seems to suggest that people can choose to invest in Bitcoin as a way to protect their savings from government expropriation. Mind flew.

Arbitrary seizure of assets

In years past, “arbitrary seizure of assets” was something that only happened in dystopian novels like those of George Orwell. 1984. Unless there is criminal activity or other wrongdoing, governments simply cannot take your money. But consider what is happening now in Western society. We are moving very quickly from “cancellation of platform” to “cancellation of banking” based on their views. Encouraged by the efforts of Big Tech social media companies to ban, censor, and abolish people with certain opinions or opinions, it now appears that financial services companies are beginning to slide down that same slippery slope as well.

Image source: Getty Images.

Just look what’s happening now with Kanye West. c. B. Morgan Chase (NYSE: JPM) She is now looking to sever her relationship with Kanye West based on the very problematic and offensive things he said online and in public. In the same way, payment services giant PayPal (NASDAQ: PYPL) It recently came under public criticism for its controversial plan to fine customers $2,500 every time they post misleading information online. To his credit, PayPal immediately backed down and apologized.

Bitcoin vs Censorship

In a recent interview on Bloomberg TV, Ark Invest specifically referred to Bitcoin as “censorship-resistant.” This means that investing in Bitcoin allows you to say certain things – even if they violate the terms of service of a particular platform – because there is no fear of censorship. Ark Invest also notes that Bitcoin is “non-sovereign,” meaning that a sovereign government will never be able to peek inside your crypto wallet and see what’s inside. You know, just in case they don’t like what you say about them online. We saw this scenario in Canada earlier this year, when the Trudeau government attempted to freeze the bank accounts of anyone helping a “caravan of truck drivers” in Ottawa. The easiest way to silence the opposition, it seems, is to withdraw it from the banks.

From this perspective, Bitcoin can be a way to circumvent the existing system and keep your assets safe from seizure. This may be the last of Cryptocurrency benefits. A decade ago, bad actors were the ones trying to hide their shadowy dealings from the state. This time, people who no longer trust sovereign governments to do the right thing. This does not mean that this is the only reason why people invest in Bitcoin – the vast majority are simply looking to make a profit. Already, crypto enthusiasts are urging Kanye West to launch a new cryptocurrency or invest in Bitcoin as a way to avoid bank cancellations. Perhaps not surprisingly, Kanye West has already been seen in public wearing a baseball cap, Satoshi Nakamoto, as a nod to the unknown creator of Bitcoin.

The Three Pillars of Bitcoin Valuation

Of course, the team at Ark Invest doesn’t point out that this fear of censorship and asset confiscation is the only reason behind a $1 million price tag for bitcoin. As the company’s crypto analyst said in an interview with Bloomberg TV, Bitcoin use cases are additive — you can stack them on top of each other to get to the final valuation. Bitcoin’s primary use case is as a digital store of value, similar to gold. The second use of Bitcoin is as a payment and settlement network. “Asset Seizure Insurance Policy” is the third and final use case.

The $1 million price tag for Bitcoin might sound ridiculous and fanciful, but if the community keeps trying to cancel the accounts of people who don’t approve of it, in a few years it may not seem so strange. At this point, the only people who will be able to truly say what they think and feel may be the ones with the foresight enough to switch their money from digital to crypto.

JPMorgan Chase is an advertising partner of The Ascent, the Motley Fool Company. Dominic Bassolto He has positions in Bitcoin. Motley Fool has positions in and recommends Bitcoin, JPMorgan Chase, and PayPal Holdings. Motley Fool has a profile Disclosure Policy.

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