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I believe that the market for BTC will ultimately be “cornered,” with the winners winning big, and the losers losing everything. As the man said, timing is everything.
Four features of Bitcoin lead me to that conclusion.
There is a maximum number of Bitcoin that can ever be mined, at least under the current rules.
The estimated date for the mining of the last Bitcoin is still over a hundred years off, so what happens when that limit is hit does not seem to me worth examining. I would argue, though, that not enough new BTC are being mined to effect the supply/demand dynamic anyway. Thus, for purposes of pricing BTC, I think it’s safe to treat the creation rate as already zero. At least, that’s the simplifying assumption I am going to make.
The cost of mining one Bitcoin provides a floor on the miners’ asking price while the network remains viable, but no law of nature requires that the network remain viable. If the price drops below a certain point, the network may collapse, but if that happens, it happens. Lots of things go into determining the floor on the asking price from miners. But one source’s ask cannot control the market’s bid.
Because the supply of Bitcoin is fixed, the market can be cornered; one buyer or group of buyers can buy up most of the float, because no…