The storm is about to come and the wind is filling the building.
1,284 days ago, I published a video about the Bitcoin halving, predicting that the price of the currency would rise to $55,000 after the halving.
That day was April 17, 2020, and Bitcoin’s closing price was $7,125.
A few years have passed and the halving will happen again soon. To be precise, it will happen at some point in April or May 2024.
This is the fourth halving in the history of Bitcoin, and it is also the last chance for ordinary investors. It is like the entrance of an ancient city wall under the setting sun, leaving only a crack as thick as a thumb. When this door closes, the last chance to get on the bus disappears.
Xiao Feng's biggest regret at that time was that he could not save A'Zhu. "I am a Khitan, so what ambitions can I have?"
When a golden vase falls into a well, there is no turning back.
My biggest regret is that I have been focusing on starting a business for the past ten years, but before I have accumulated enough coins, the game is about to end. This is also a fate.
How to define scarcity
An Arab scholar, Seifdeen Amos, wrote a book called "Bitcoin Standard" in 18 years. In this book, he talked about a " stock-production " model, which is simple In other words, it is the relationship between inventory and annual output.
When we say inventory, we are counting the total quantity of an item.
Annual output is the total amount of this commodity produced in a year.
Dividing the two, we have a ratio called SF.
In the picture, you can see that the SF of gold is 62 and that of silver is 22. What does this mean? That is to say, it would take you 62 years to produce the same amount of gold as now, 22 years for silver, and 0.4 years for platinum. This all shows one thing: they are extremely scarce.
We began to wonder, are these things becoming currency because they are scarce? In contrast, platinum and palladium have an SF value of 1 or less, indicating that they are not that scarce.
It is indeed true that gold has a stronger preservation value than other metals inside and outside the watch.
The SF values of the commodities we use in daily life, such as food, mobile phones, computers, and cars, are far less than 1, which means that they have never been scarce. Why? That’s because as long as someone wants a product, you can produce it. Once someone wants to stock up, the price will rise, and more companies will produce. Prices will definitely fall.
This is common sense about supply and demand balance.
Then we can easily draw a conclusion that if the SF of a commodity is higher, then it can maintain its value and the less it will be diluted.
Look at gold. In 1972, it was US$46 an ounce. In 2020, it reached a new high of US$1,744 an ounce, a total increase of 37.9 times. So why don’t we create more gold to meet demand? The reason is that the amount of gold mined is limited by mining technology and cost. If it costs you more to do something than you earn in the end, you will definitely not do it .
So, what is the SF value of Bitcoin? 18.3 million Bitcoins have been mined in the world. However, a research report said that in fact, more than 1.6 million of the 18.3 million Bitcoins have been permanently lost.
Therefore, there are only about 16.7 million Bitcoins that can actually be used. Based on the current annual output of Bitcoin, its SF is about 54, which is similar to gold.
In a few months, Bitcoin's SF will rise to 108, and the annual inflation will be only about 0.9%. This means that Bitcoin has become the scarcest asset in human history since gold .
Halving is the underlying reason for changing the supply relationship of Bitcoin, not anything else.
And this supply relationship determines the currency price.
Some people get excited when they hear about Bitcoin ETF , as if as long as it passes, the price of the currency will skyrocket, which is amazing.
I suggest that you don’t read the headlines and hype in the media, but look at the inside of things.
It doesn’t matter if the BlackRock Bitcoin ETF passes or not, nor does it matter when.
What is important is that the expectation of "Bitcoin ETF passing", as a bait to mobilize market confidence, will gradually form momentum and unknowingly push the currency price to above $45K in the future.
You think you are still in a bear market, but in fact the bear market ended quietly without you knowing it.
And this potential energy will continue. It is not your water pipe.
BlackRock and subsequent ETFs, like the Suez Canal (Arabic: قناة السويس), connected old money to new pools. The amount of insurance funds from traditional finance is huge, exceeding many people's imagination. Bitcoin is not too expensive for them, but too cheap and the plate is too small.
The mighty Suez Canal connects north-south two-way water transportation between Europe and Asia. Since then, ships no longer have to go around the Cape of Good Hope at the southern tip of Africa. Fleets depart from London, England or Marseille, France, and sail to Mumbai, India, returning laden with gold, silk and spices.
King Darius I of the Persian Dynasty completed the last section of the Suez Canal in 500 BC. He erected a granite stone tablet in one of the river areas, which read:
I am a Persian, I rose from Persia and conquered Egypt. I ordered this river to be opened, and it would start at the Nile and flow through Egypt, and end at the vast sea near Persia. This river will be completed, and Egyptian ships can follow it directly to Persia, as I wish.
Saith King Darius: I am a Persian. Setting out from Persia, I conquered Egypt. I ordered this canal dug from the river called the Nile that flows in Egypt, to the sea that begins in Persia. When the canal had been dug as I ordered, ships went from Egypt through this canal to Persia, even as I intended.
Cool and crazy, this is the charm of the channel.
The passage of the Bitcoin ETF will affect not just the moment, but the next dozen years. After the legal currency entry and exit channels are clear, time will do the rest.
By 2025, maybe we can really see $100K+ Bitcoin.
Bitcoin gradually evolved into the land of Manhattan and became a marker of social class . People choose Bitcoin not because it transfers faster than other currencies, but because it is expensive.
It is expensive because it condenses the core consensus in the entire encryption game. As a vehicle for storing value, it is also an object that can be shown off in social relationships and is sought after by everyone.
Bitcoin demonstrates your strength, your stability, your loyalty and your belief. It is your courtyard house in the Second Ring Road in Beijing, the old house on Hengshan Road in Shanghai, and the villa in the Mid-Levels of Hong Kong.
Its value is determined by the wealthy class with real purchasing power . For example, a single share of Berkshire Hathaway's Class A shares is as high as US$530,000. Funds flock to it and it continues to prosper. It is difficult for retail investors to even buy one share. Climbing to heaven, so what.
Ten coins can be called a lord.
price anchoring game
If a person does not understand how currency prices are anchored, he or she does not truly understand Bitcoin.
Let me talk about land first, and then back to Bitcoin.
Everyone has played "Monopoly", but I rarely see anyone express its essence.
You need to know in your mind that the role of the Federal Reserve is similar to the bank in the board game "Monopoly". Its goal is not to win, but to provide enough funds to keep the game going .
For the Fed, the right amount of assets is the amount of assets that best enables it to fulfill its responsibilities.
Monopoly is actually a land speculation game. The core is to monopolize resources. At the end of the game, there is only one winner, and other players are burial objects.
Victory does not come from competition, it comes from monopoly.
Ask, where does the financial revenue of a central empire come from?
Answer, there is no difference from Monopoly, nothing more than:
state-owned enterprises
public land
monopoly financial system
For a centralized government, it only cares about two points in this game:
1) How to control the entire society with a top-down bureaucratic system;
2) How to feed this bureaucracy through commissions from the land, tax and financial systems.
Countries all over the world are similar, and there is not much difference between ancient and modern times.
Take the Tang Dynasty as an example. The government implemented a land equalization system. Every male born was allocated 80 acres of public land and 20 acres of Yongye land (private land). When a person is in his prime, he cultivates wasteland, collects grain, and performs labor. The annual harvest is handed over to the government in proportion. After death, the cultivated land is recovered. At the same time, the emperor also allowed local governments and yamen to own operational land and funds.
The system eventually collapsed as land became increasingly concentrated in the hands of bureaucratic and aristocratic powers.
For example, during the reign of Emperor Gaozong of the Tang Dynasty, a man named Wang Fangyi occupied a lot of land, probably dozens of hectares. By the time of Emperor Zhongzong of the Tang Dynasty, Princess Taiping owned a lot of fields spread across fertile areas. These lands were rented to poor farmers for cultivation, and most of the harvest was given to the powerful, and the government had to take another one. Many people hid in the countryside to escape hard labor. The government first registered the names of these fugitives in a book, and then simply ordered the fugitives to pay taxes. They either sold their land or houses, or transferred them to their neighbors. This cycle continued until there was no escape.
What should I do if the game fails? Another round.
Therefore, dynasties changed, peasants revolted, and the redistribution of resources was completed.
The same is true in modern times. Most of the asset values promoted by East Asian countries are tied to land. These are the rules of the game set by the government, and the carrier is the house.
The United States advocates capital efficiency, so the national game they play is the stock market, and the purchasing power represented by the national 401K pension is the reservoir.
These are all different price-anchored games , and there are countless similar copies scattered around the world, such as Rolex, Hermès Birkin bags, Yu-Gi-Oh cards, limited edition blind box figures... all of them are like this.
New York, USA, is developed enough and the building density is high enough, right?
However, there are still more than 25,000 pieces of idle and under-used land, a total of 25,000 pieces (the light colors in the picture are vacant lands).
There is even a proposal to impose a 3.5% tax on these lands, bringing in an additional $429.9 million to the city.
Beijing, the most populous city in northern China, has an area of 16,000 square kilometers, but only 2,000 square kilometers of actual built-up area. Its land development rate is only 12.5%, even stingier than Hong Kong (25%).
It is actually easy for Beijing to build large villas per capita. According to China's planning standard of 10,000 people per square kilometer, the city can accommodate 160 million people after it is fully developed.
That being the case, why haven’t any of these governments built buildings to shelter the poor people in the world?
Because in this game, land is the means of production, and the monopoly must maintain its scarcity in order for the game to continue.
What is price anchoring? This is called price anchoring.
To win, you must understand Bitcoin’s place in the crypto game…
