Chamath Palihapitiya, founder and CEO of Social Capital, explains that to understand Bitcoin, we need to look at how its price changes after each "halving" event. Halving is when the amount of new Bitcoin created and brought into circulation is reduced by half. Imagine an orange orchard, where after one night, each tree only produces half the number of oranges. Since there are fewer new oranges (or fewer new Bitcoins) on the market, each orange (or each Bitcoin) will become scarcer and may have a higher value.
Price increase after Halving: Is history repeating itself?
Chamath points out that after previous halvings, the price of $BTC tends to follow a certain pattern:
In the first 1 to 3 months: Most investors are confused and cautious, uncertain about the direction of the price.
6 to 18 months later: Historically, Bitcoin's price tends to increase significantly. For example:
After the first halving: Increased 45 times.
After the second halving: Increased nearly 28 times.
After the third halving: Increased by approximately 8 times.
Even the lowest increase among these is a huge figure compared to traditional financial markets.
Bitcoin ETF: The main driving factor
Chamath emphasizes that, in addition to the halving effect, Bitcoin is currently being "democratized" strongly through Bitcoin ETF funds. ETFs are financial products that help investors buy Bitcoin easily, just like buying regular stocks. He believes that these ETFs are a turning point, helping Bitcoin reach a wider audience as they no longer need to worry about digital wallets or complex security keys.
He notes that looking at historical growth rates is not a prediction for the future or investment advice. This is just data that has occurred. However, if the average increase from previous cycles is applied to the current Bitcoin price, the growth potential is very large.
Bitcoin: A safe haven for the future?
Chamath also presents the scenario that many countries with weak or depreciating currencies may begin to use Bitcoin alongside their national currency. Imagine living in a place where your salary quickly loses its value. People in those places may use local currency for daily expenses but will use Bitcoin to store long-term assets, like buying gold or real estate to preserve asset value.
Ultimately, Chamath predicts that if Bitcoin continues to rise like in previous cycles, it could gradually replace gold as the primary "store of value" globally. Coupled with concerns about the US dollar potentially losing purchasing power, he believes this will open up significant opportunities for both individual investors and nations.