Nothing is forever. I understand that items that display super-linear power-law growth have a tendancy to collapse when some resourse limit is reached and this causes me a little anxiety.
So I used your Power-Law constants (which i believe the most likely interpretation) to roughly plot the market capitalisation of BTC (20M x Price) against Global Wealth (900T USD invcreasing @ 7%/Year) - I really have no idea what the actual Global Wealth is or whether this includes Sovereign Reserve Funds of Company Treasury Funds, but it was good value to just to see what happens.
To my surprise, the market capitalisation of BTC was never more than 20% of Global Wealth. This was achieved in 2092 when the annual growth of bitcoin was 7%.
So many questions arise:
- What happens to btc power-law growth if investors do not have confidence to transfer 20% into bitcoin?
- How will btc react when its future 7% growth has little difference to other investment options?
I don’t think we know. If BTC reaches 20% of global wealth that would be about twice the global fiat money supply which runs roughly 10%. Would there be adoption of Bitcoin as the global monetary standard, it could happen but is not guaranteed. There are a lot of intermediate possibilities such as partially BTC backed fiat, BTC being preferred in international trade, etc. Certsinly more corporate treasury and pension fund adoption likely. It is a little early to get anxious when the next two decades it will have high double digit returns. There is no denying it is superior technology, Money 3.0
Dear Stephen, many thanks for these insights.
Nothing is forever. I understand that items that display super-linear power-law growth have a tendancy to collapse when some resourse limit is reached and this causes me a little anxiety.
So I used your Power-Law constants (which i believe the most likely interpretation) to roughly plot the market capitalisation of BTC (20M x Price) against Global Wealth (900T USD invcreasing @ 7%/Year) - I really have no idea what the actual Global Wealth is or whether this includes Sovereign Reserve Funds of Company Treasury Funds, but it was good value to just to see what happens.
To my surprise, the market capitalisation of BTC was never more than 20% of Global Wealth. This was achieved in 2092 when the annual growth of bitcoin was 7%.
So many questions arise:
- What happens to btc power-law growth if investors do not have confidence to transfer 20% into bitcoin?
- How will btc react when its future 7% growth has little difference to other investment options?
I don’t think we know. If BTC reaches 20% of global wealth that would be about twice the global fiat money supply which runs roughly 10%. Would there be adoption of Bitcoin as the global monetary standard, it could happen but is not guaranteed. There are a lot of intermediate possibilities such as partially BTC backed fiat, BTC being preferred in international trade, etc. Certsinly more corporate treasury and pension fund adoption likely. It is a little early to get anxious when the next two decades it will have high double digit returns. There is no denying it is superior technology, Money 3.0