Difficult To Swallow
This is perhaps difficult for many BTC haters and naysayers to accept, but even in a bear market, Bitcoin’s market cap exceeds that of Visa’s. Provided, BTC is trading above $26.5K, its market cap outranks Visa. This is further amplified during a bull market and gives a fair indication of what to expect in the next two to three years.
It won’t be long before Bitcoin’s market cap is significantly higher than that of Visa’s, as well as many other highly ranked companies. It’s quite clear that Bitcoin has managed to carve out its unique niche, and is on the path to significant adoption. It’s also important to view Bitcoin’s accomplishments relative to its level of adoption. This is perhaps one of the most bullish cases for BTC.
When you take into account Visa’s exceptional adoption rate, as well as its extensive history, Bitcoin’s progress is even more impressive. Yes, Bitcoin is here to stay, but what are the reasons and motivations that validate the ownership of this asset? This is perhaps open to interpretation. However, I believe that Bitcoin is on a very specific path, even though it is a multidimensional asset.
This is perhaps part of the problem, as many have tried to classify Bitcoin according to pre-existing asset classes. However, it’s an entirely new asset class, which is multifaceted and not limited to a single use case, or classification. That being said, I do believe that Bitcoin will predominately function as a long-term store of value that has the flexibility and practicality that gold and other asset classes lack.
The days of utilizing and leveraging Bitcoin as a significant wealth-creation tool are over, in my opinion. In comparison to TradFi, Bitcoin gains are still rather attractive. However, in comparison to the altcoin market, Bitcoin doesn’t have much to offer. Realistically speaking, Bitcoin is likely to reach anywhere between $180K to $300K in the upcoming bull market.
Even if BTC were to outperform this projection, in percentage terms, it’s still a relatively modest return when it comes to the broader Crypto market. Essentially, BTC has transitioned from a wealth-creating asset to a wealth-preserving asset. It’s important to remember that wealth is preserved over the medium to long term when it comes to BTC.
Don’t expect to store and preserve value over a 6 to 12-month period, especially during a bear market. However, investors looking to preserve their wealth over 5 to 10 years and beyond are likely to be pleased by Bitcoin’s average benchmark performance. The additional benefit of instant liquidity provides another extremely attractive perk for any investor, regardless of the intention or motivation behind their Bitcoin investment.
At the end of the day, Bitcoin can still produce significant returns. However, true wealth creation now resides with altcoins and especially micro-cap projects. Looking to make bank with Bitcoin, or even Ethereum is not a realistic investment strategy. Quality altcoins and micro-caps are where true alpha lies. Bitcoin is now a means to ensure modest appreciation in the form of a non-custodial investment vehicle.
The excitement that exists regarding a $10K ETH is much ado about nothing. Expecting a 5X, or even 10X return on your Crypto investment is a waste of a good opportunity, in my opinion. Once you have experienced a 50X, 100X, 300X, or higher, you will be looking to replicate these returns. Of course, that does not disqualify diversification, portfolio construction, and risk management.
It does however create an awareness of what is possible, which for many, is enough to begin aiming higher. That’s at least my viewpoint. BTC sets the standard and creates a level of safety, security, and significant appreciation over the long term. However, it’s no longer an asset that creates enormous returns, unless you consider 5X or 10X a significant return. What are your expectations regarding BTC and are they realistic? See you next time!
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This article was first published on Sapphire Crypto.