March 5, 2024

Today, why are we discussing this topic? There are three reasons: First, during a weekend VIP member communication, we talked for about 40 minutes. At the end, he said that over so many years of operation, he found that the returns were not as good as holding coins. He mentioned that he entered the market in 2016 and had 400 bitcoins and 100,000 LTC. At that time, his understanding wasn't enough; he might have sold when Bitcoin increased fivefold. If he had held onto them, he would be financially free now. But now that 24 years have passed, after six years, he doesn’t have a single bitcoin left and feels very pained (or maybe not pain, but dissatisfaction). I said, yes, it's really better to hold onto the bitcoin. Otherwise, 400 bitcoins would now be worth over $25 million, and LTC would be $100, making it worth $10 million. Combined, that’s already 200-300 million in assets, allowing for an early retirement to travel the world.

The second reason is that I have been thinking about how high BTC can go this time, and I even estimated how high the next wave could reach and how much time is left for ordinary people to have a chance to buy one BTC.

Assuming this wave can reach $200,000, that would be approximately ¥1.4 million. If this bear market adjusts by 50%-60%, the bottom range would be between ¥560,000 and ¥700,000. The next bull market could see a peak of $500,000, or about ¥3.5 million. Even if it adjusts by 50%, it would still be ¥1.75 million. This means that after this wave of bull and bear transitions, it will be very difficult for an ordinary person to buy a bitcoin because if you consider an average person, like someone delivering food or an ordinary wage earner with an annual salary of ¥100,000, for a ¥1.75 million bitcoin, they would have to work for 17 years without eating or drinking to afford it. However, BTC is continuously rising, so this pace will surely not keep up. Therefore, after this wave of bull and bear, it will be very difficult for ordinary people to own a BTC.


The third reason, (Everyone should own a BTC) is the title of an article I saw when I entered the market in 2017. I forget if it was written by Old Cat or Li Xiaolai, but it was also my enlightening article. Although these big shots have almost retired now, this concept is still deeply ingrained in my mind. Therefore, for the crypto world after six years, I can take up this philosophical mantle and write a new version of (Everyone should own a BTC) for the new entrants. Maybe this will change your life, as long as you hold the coins in your hand. And one more important point, Satoshi Nakamoto's white paper (A Peer-to-Peer Electronic Cash System) must be read repeatedly until you understand it. What does understanding mean? It means you will immediately take out money to buy BTC, even if it is just to start with a 1% allocation. That action matters.

Here I will discuss from three perspectives: 1. The value of Bitcoin; 2. Human flaws; 3. The redistribution of social wealth.

1. First, let's talk about the value of Bitcoin:

1. Bitcoin was originally designed to solve payments, as you can see from its name, it is a peer-to-peer cash payment system. However, after so many years, it has not upended the payment system because current payments are still passable. Moreover, BTC itself is not very convenient for payments (high GAS fees, 10-minute settlement), yet it has become a tool for value storage, dubbed digital gold because its total supply is only 21 million, with annual mining rates and halving every four years, leading to a regular increase in its value (the previous three halving market trends have not been broken). The crypto world has celebrations every four years, so many people say that Satoshi Nakamoto is a football fan (because the World Cup is also once every four years).

So to summarize, its first value is that it is a deflationary currency with a total supply limit, which halves every four years, and currently, a lot has been lost (over 3 million have been lost, and this will only increase over time), so the total amount will only continue to decrease. We all know that rarity increases value; for example, high-quality jade, purple gold nanmu, etc., all have these characteristics.


2. If you want to say what real value Bitcoin has, it really has no value. Its only value lies in its explosive growth, which has attracted countless people's attention. Where there is attention, there is money. There is an economics book called (Attention Economy) that discusses how to create a new economic system through attention, advertising, and marketing. This is why Douyin is so profitable now, because it can attract a large number of viewers. With traffic, it can be converted into profits. This has led many people to enter the market. For example, someone (Vitalik Buterin) created Ethereum, saying that he wanted to improve the blockchain, enabling applications to be developed on Ethereum, thus giving the blockchain real utility. Therefore, there are investors, and where there are people, there is a market. Where there is a market, there are all sorts of intrigues, deceptions, various funding schemes, and scams, which has resulted in a poor reputation for the industry. However, this year may improve a lot due to the approval of the spot ETF, and the government should have more regulations and compliance, which is actually a big positive. As it becomes more compliant, it will develop better in the future.

So we can summarize its second value, which is its explosive growth that has attracted a large number of people's attention. Since its inception in 2008, there was no price at that time. In 2010, a trader used 10,000 bitcoins to buy two pizzas, which gave Bitcoin a price, and then it soared. Moreover, each time the increase is quite exaggerated. The last time it was 30 times, and the time before that was 90 times. This time, at least 15 times? If calculated from the lowest point, that would be $200,000. So currently, $60,000 is just the beginning. Calculating from each peak, in 2013 it was $1,100, in 2017 it was $19,000, about 20 times; then in 2021 it was $69,000, about 3 times. So this time, the peak should be about 2 times, which means $70,000 * 2 = $140,000, so there is also an expectation of $150,000.

3. The value of Bitcoin, the value of the currency standard, is that it is the current faith subject in the blockchain world. Without Bitcoin, there would be no other chains. The total market cap of cryptocurrencies is $2.4 trillion, while the total market cap of BTC is currently $1.2 trillion, accounting for 50% of the share.

In our real world, it is fiat currency-based, meaning that everything is measured according to the current national currency. For example, a bun costs ¥3, while a pizza in the US might cost $20. In ancient times, we might have used a gold standard, exchanging gold and silver as currency, such as a bowl of wine costing an ounce of silver. Going further back, shells were used for trading among primitive people. In the cryptocurrency world, we must think in terms of currency standard, meaning we need to find ways to exchange for BTC because when cryptocurrencies first came out, there were no stablecoins, and all other coins were traded against BTC, making BTC the foundation of all coins.

2. The inherent flaw of humanity

The second question, let's discuss human flaws. Why can't most people hold onto BTC? We often hear someone say, I've made ten times my investment in some Bitcoin and feel very happy, but what you don't know is that they actually missed the chance to make 100 times because after selling for ten times profit, it's really hard to buy back at a higher price. Humans have an aversion to loss, which is a flaw in us.


The second human flaw is that we are inherently short-sighted. I’m referring to most people; there are a few who are long-sighted, and these individuals become great, such as Elon Musk, who wants to build rockets to migrate to Mars. He likely doesn’t know if he can complete this plan during his lifetime, which is quite magnificent, and he has achieved great results. Similarly, there are people like Steve Jobs and Bill Gates.

However, human short-sightedness is not something we can easily change; it's ingrained in our genes. In ancient times, we might not have enough to eat or warmth to wear, so how could we think about ten years ahead? We are likely thinking about what tools we will use tomorrow, what prey we will hunt, and where that prey will appear. When we catch the prey, we think about how to store these goods. So, at most, we can only think of activities within three days. This has been ingrained in us through thousands of years of evolution. Earning ten times our returns today and cashing out is very normal. Although it’s hard to change, we need to understand the principle and try to look a little further. For example, can you make a ten-year plan? You could ask people around you what their ten-year plans are. I think most people wouldn’t have an answer. So if we want to improve ourselves, we should first give ourselves a ten-year plan. My current ten-year plan is to host a ten-year blockchain program, but in 20 years, I won’t be able to see it either. I’m not as great as Elon Musk.

3. The redistribution of social wealth?

Why are retail investors holding fewer bitcoins?

1. Wealth inherently has a gathering effect, meaning money or wealth tends to concentrate in places with more money or wealth, forming a cycle where the rich get richer and the poor get poorer. The same principle applies to BTC. This point has been discussed by Marx in (Capital) long ago, and it suggests that one day, when the wealth gap is extremely wide, and the poor can’t afford to eat, that could spark a revolution, leading to a possible arrival of communism. Of course, we are uncertain if we will witness that day.


2. Let's look at the current distribution of gold holdings, which can actually provide us with some insights. Currently, the reserves of gold are first 68% in the United States, followed by Germany, Italy, and France, which seems to correlate with the national power and development level. We often see American wealthy individuals wearing gold jewelry, sometimes even having gold teeth, which is quite exaggerated, right? So wealth flows to where there is money.

3. The current distribution of Bitcoin

Let's take a look at the current distribution of Bitcoin. Satoshi's address has 1.1 million (5%), 3.7 million are lost (17.6%), miners hold 700,000 (3.4%), retail investors hold 12 million (57%), governments hold 560,000 (2.7%), ETF funds hold 800,000 (3.9%), institutions hold 750,000 (3.6%), and there are still 1.3 million that have not been mined. Therefore, the number of permanently lost coins should be around 4-5 million.

So the current situation shows that retail investors still outnumber institutions and governments. Therefore, it is currently a good time for retail investors. As the process advances, I believe this ratio may reverse, which means that institutions and governments may hold 56% of the tokens (100-5.2-17.6-6.6)*0.8, while retail investors only hold 5%-6% of the tokens. This is also often cited in the saying that 20% of the world's population holds 80% of the wealth.

The ultimate deduction of Bitcoin

1. How much value can Bitcoin reach in the future?

Assuming the current value anchored to gold, gold is currently worth $8.2 trillion, while Bitcoin is $1.2 trillion, which is about 7 times less. Therefore, the current price of Bitcoin is $65,000 * 7 = $450,000 each.

If we calculate based on each four-year cycle where the peak doubles, in 20 years, that is, five cycles of bull and bear, it would be $69,000 * 2 * 2 * 2 * 2 * 2 = $2.2 million. So if we cut it in half, that's also $1 million.

This means that if you currently hold one BTC, in 20 years it could potentially reach $1 million to $2 million. And 20 years is not a long time. You will be able to see it in your lifetime.

If you leave your son or the next generation with this, is it possible that it could reach $10 million each? At that time, they could put it in DeFi, earning 4%-5% annualized returns, which is $500,000, potentially without doing any work.


2. In the future, how many ranks can you hold with one bitcoin?

Assuming Bitcoin becomes popular in the future, meaning everyone in the world knows about Bitcoin, similar to how gold is recognized. Out of 6 billion people, 20%, or 1.2 billion, will hold the aforementioned 80% of Bitcoin, while 80% of people will hold less than 10%. As mentioned earlier, around 5 million have been lost, resulting in a circulating volume of only 16 million. Wealthy individuals will take away 1,280,000 bitcoins, averaging 0.01 bitcoins per wealthy individual. Therefore, without a doubt, having one bitcoin already places you within the wealthy circle.

Moreover, even in terms of value, there are 16 million circulating bitcoins, so you must be among the top 16 million, and even more so, as there could be many at the top and possibly none at the bottom. Therefore, in the future, holding one bitcoin might put you in the top 5 million.


What we just discussed, that 20% of people hold 80% of the wealth, is actually a more brutal truth.

In this global wealth distribution map, the top 1.1% of people hold 55% of the wealth. (Data shows that adults with $1 million (approximately ¥6.73 million) account for 1.1% of the global population, and their total assets reach $191.6 trillion, accounting for 45.8% of global wealth.) This wealth amount only requires $1 million. As mentioned earlier, BTC will definitely reach $1 million in the next 20 years, which means you are not only entering the top 20% of humanity; you have already entered the top 1.1% globally, making you one in a hundred.

Currently, there are 50 million non-zero addresses for Bitcoin. Compared to the global population of 6 billion, there is still a significant gap. Currently, addresses holding more than one bitcoin do not exceed 2% (around 1 million). So, holding one BTC puts you in the top 2% of holders, and if we look globally, it would be in the top 0.01%.

Final summary:

1. The value of Bitcoin will not be summarized; everyone should research and experience it themselves.


2. Human flaws, we have recognized our flaws and are working hard to become better people. We should focus on the long term, exercise more, and maintain health. In the end, we will find that health is priceless. Knowing this, we should gradually implement it. I am also working hard to exercise, although sometimes I can be lazy.


3. For those who can hold onto a bitcoin in the long term, we can deduce from several dimensions that they can at least rank in the top 10 million, which is the top 0.1%.

Finally, I wish everyone will soon get their own BTC! #ContentMining #BTC走势分析 TC‬