Bitcoin, World Reserve Currency

Let’s pause right here after this headline. If something has a potentiality like this, wouldn’t you want a foot in the door, even just speculative with a small amount at least? Undoubtedly, we have proven 90-year cycles that there are different world powers who alternate between the leadership position of holding the reference currency. China might be the world’s economic power of the future. They are working on a cryptocurrency right now with more success than most competitors. Even if you estimate a slim probability for today’s headline to manifest, you do not want to be surprised by such a prospect and maybe even hold a speculative position of Bitcoin just in case. Bitcoin, World Reserve Currency.

World Reserve Currencies

World Reserve Currencies

Think of it this way. The most crucial factor for any investment is its risk. The second most vital factor is potential. We can extrapolate a risk/reward ratio from these two factors that most traders seek to evaluate if a trade is worth taking. With technical analysis as a supportive tool, risk can be assessed relatively easy but where guessing gets more challenging is the actual potential of Bitcoin and its target price.

Using basic principles of total possible market evaluation, Bitcoin would address the absolute largest possible store of value market a world reserve currency. We are talking hundreds of trillions of dollars.

How realistic and probable is the likelihood of Bitcoin dominating the store of value market competing with Gold and fiat currencies, real estate, and bonds?

Well, ten years ago, Bitcoin was geeky and held in a community of idealists. Now it is worth one trillion dollars in the store of value concept. That leaves room for a factor of 100 or more multiplied by today’s Bitcoin price as a potential target. So far, Bitcoin was able to rise from a few bucks to nearly US$65,000.

Recently institutions have started buying into these investment vehicles. Consequently, confirming that after more than ten years, Bitcoin´s geek times are over. Now imagine the possibility that governments would begin backing their currencies not just by Gold but also by Bitcoin. Then, we could easily see a Bitcoin expansion on a much larger scale. Institutions just wet their beaks, and with a final wave of individual investors likely, we see quite a potential to a bet on Bitcoin that is supported both from a fundamental perspective as well as from the technical side.

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Disclaimer: All published information represents the opinion and analysis of Mr Florian Grummes & his partners, based on data available to him, at the time of writing. Mr. Grummes’s ...

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