AAX adds the ability to view Balance in Satoshis
Even after dropping by 50%, with Bitcoin now trading in the $30,000 to $35,000 range, new entrants to the space might still feel Bitcoin is ‘too expensive’.
It’s a common misconception, because it’s not so much about price as it is about ratio when you’re looking for returns. For example, if you buy 1 Bitcoin at $100 and it rises to $150, it is effectively the same as buying $100 worth of Bitcoin at $30,000 and seeing it rally to $45,000. Percentage wise, no difference.
Nonetheless, with people often comparing Bitcoin to traditional shares (i.e. non-fractional), some people seem to think they need to buy a whole Bitcoin, each time they want to invest. This is not true.
Bitcoin is divisible. Just like 1 dollar can be divided in 100 cents, 1 Bitcoin is made up of 100 million satoshis, or SATs, as they are sometimes called. The wisdom of this should be clear. There will only ever be 21 million Bitcoin and if we imagine a time with billions of people using the network, such high divisibility is crucial.
In the past, just a few years ago, when Bitcoin was worth just a few hundred dollars, it was fine to think in terms of Bitcoin as the main unit, and many people would actually mine, buy and transact whole Bitcoins on the regular.
But as we see Bitcoin rise above $50,000 again and even higher in the future, there are calls in the space for starting to use SATs as as a way of thinking about your Bitcoin holdings. Rather than saying, I bought 0.0001 Bitcoin, you could say, today I bought 10,000 SATs. It sounds better. You might feel better. It seems more user friendly. Some might argue this approach would accelerate Bitcoin adoption.
Meme coin trickery?
It’s very easy for new crypto traders to get attracted to meme coins such or Dogecoin and Shiba or even more serious tokens such as XRP, simply because they are ‘cheaper’. The dream, with Dogecoin for example, is that the meme coin will one day reach a value of $1.
For these new traders, the idea is that compared to a mature asset such as Bitcoin, it would be easier for a cheap coin to 10x. And to be fair, during particular crypto seasons and cycles such results are definitely possible.
Of course, the more deepened investor understands that an asset like Bitcoin is for the long term, for a hundred years or more, while with meme coins that live and die with hype, there is no telling for how long they will be around.
This is an important point: Having missed the Bitcoin boat at $100 dollars, doesn’t mean it’s no longer possible to build up significant wealth with Bitcoin, and it certainly doesn’t mean that cheaper coins have a better chance of giving such lasting returns.
For day traders, it’s more important to look at market cap and trade volume rather than price. When volume on low market cap tokens rises, volatility usually rises with it and that’s what day traders look for. HODLers, will be less concerned with volatility and rather look at long term growth trends, such as user adoption, capital inflow, distribution and so forth.
But these are more advanced approaches to investing in this asset class. For many newbies, who are literally just getting started, or even for new entrants such as merchants or everyday Salvadorians who just want to buy a coffee with their Bitcoin, sensitivity to price and unit is more pronounced.
Are there enough SATS for everyone?
Are there enough SATS for everyone? With about 18.5 million Bitcoin mined and in circulation, there are about 1.85 trillion SATs in existence. In a world with 8 billion people, that’s about 231,000 SATs for every person on the planet (or 0.00213000 BTC). At today’s prices ($34,000), that’s about $72 USD. As you might know, however, about 20% of all Bitcoin is permanently lost due to various reasons such as people losing their seed phrase. Taking this into account, there is just about 50,000 SATs for every person in the world.
If you believe Bitcoin will be worth more than $34,000 in say 15 years from now, then it might be time to stack up on those SATs and get at least your fair 50k SATs share. At current prices, that’s just $17 USD.
From BTC/USD to SATS/USD?
In some wallets or in the context of the lightning network, it already makes perfect sense to have the option to switch to a SATs denominated balance display.
However, we may not yet be at the stage where we can see SATs denominated spot markets. First off, buying, say, 1000 ($0,34 cents) SATs currently makes little sense, especially considering trading and withdrawal fees on most exchanges. But surely, in the future, as the price of Bitcoin rises, SATs denominated markets are not out of the question.
In the meantime, AAX is among the first exchanges to enable users to switch their main overall balance display to SATs. It’s a small tweak, but the psychological impact on how new traders and retail investors might perceive their Bitcoin or crypto holdings could be profound.
At today’s prices ($34,000 per Bitcoin), let’s see what switching to SATs would mean for your balance display.
USD Bitcoin SATs
$34 = 0.001 BTC or 100,000 SATs
$170 = 0.005 BTC or 500,000 SATs
$340 = 0.01 BTC or 1 million SATs
$1,700 = 0.05 BTC or 5 million SATs
$3,400 = 0.1 BTC or 10 million SATs
$17,000 = 0.5 BTC or 50 million SATs
$34,000 = 1 BTC or100 million SATs
$340,000 = 10 BTC or 1 billion Satoshis
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