They say gold and bitcoin don’t produce cash flow and hence aren’t real assets with value. But bulls don’t care. They just want prices to go up and make money by selling higher.
Two years ago, when Bitcoin was at $20k, I made a comment saying it has managed to make a new high after every crash. If it were a fad, it shouldn’t have been able to do that. It would have floundered after one crash and nobody would talk about it ever again. But clearly, that hasn’t been the case. Bitcoin is already 16 years old and more people are talking about it, not less.
I said that if this trend of breaking new highs holds true, we might see a $80k Bitcoin. It was divisive then and it remains controversial today.
Yes, it’s volatile. Yes, it’s risky. But my view is that one doesn’t need to risk everything in Bitcoin. Maybe allocating a small portion that one can afford to lose is still a prudent approach. Who knows, it could be a lottery ticket that multiplies your capital. Just don’t be too greedy and you won’t get into trouble.
Indeed, the bulls are cheering as Bitcoin is very close to breaking its all-time high of $69,000. It might just happen soon after this post has been published. Buying at $20k would mean sitting on a 245% paper gain.
I believe Bitcoin will make a new all-time high again.
But I don’t think it will be $80k. I’m revising my target higher.
Let’s do some simple math.
From the first peak of $1,132 to the second peak of $19,141 was about 16x returns.
From the second peak of $19,141 to the fourth peak of $69,000 (because the third peak and fourth peak were close), was about 3.6x returns.
The pattern is that the gains are getting smaller, and it has to be so as Bitcoin becomes a ‘mega cap’.
If we extrapolate this trend, we might just be looking at 1x from the previous peak. So, we’re looking at $69k x 2 = $138k.
Then the next crash may happen.
Separately, the old-money controversial asset, gold, has already broken its all-time high. It seems like the USD is weakening even before interest rates are cut. But that’s a story for another day.
One warning is that even if Bitcoin indeed breaks its all-time high, it won’t be a smooth journey. There will be pullbacks and corrections along the way. It’s like sailing in rough seas. You have to withstand the waves to reach your destination.
