Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
Don't forget guys 9.2% per year is our target. Anything above that is unrealistic.
I largely agree with the rest of what you say in your post.
I want to harp on this above highlighted point for a tiny bit.
This 9.2% target sounds like one of the underlying theses and agreement points of the hosts of the podcast "Bitcoin Uncensored." I think that they make a lot of good points when they argue that financial advisors cannot beat the overall performance of the stock market indices (which averages 9.2% over the long term), and investors should expect that they are doing well in their investment if they can average such a return, and they are unlikely to be able to provide long term evidence of beating such 9.2% performance.
I don't really know enough about the price performance of a large variety of budding industries (such as telephones and cars and computers), but I have my sense that when you do pick the right budding industries in which to invest (which could be the case with bitcoin that it is the right one this time and in these circumstances), you are going to get periods of exponential and irrational growth periods that exceedingly outperform any other investment, including indices.
One of the difficulties in picking such is that we may be able to pick the right investment once in a while, but if we repeat the experiment over and over we cannot expect to continue to pick exponential growth industries on an ongoing basis.
Anyhow, I doubt whether the 9.2% goal is realistic (I think it is too low of a goal), especially if bitcoin has another exponential growth period (like it had about 5 previous times), which is quite plausible given its currently ongoing low market cap (in comparison with its various fundamentals) which seems feasible that bitcoin is going to reasonably be able to significantly outperform 9.2% for the coming years and to perform a 10x or a 100x increase in market cap in order to become much less susceptible to volatility and manipulation... market cap growth seems like a necessity for this particular sector, whether we like it or not...
I didn't know where the 9.2% figure came from, and was going to ask, until I read the above.
There is a fallacy in the reasoning of "9.2%" because it is applied to mainstream investments, not booming/explosive markets.
Booming/explosive markets have the characteristic where you start with a 100% monopoly of a given market and then something new comes along and starts to eat from the 100% market, gradually at 0.0000001%, 0.0001%, 0.1%, 1% etc etc. It's like being in a town where there is just one shop and then another one opens and the 100% marketshare is now starting to split. The new store, with 0% marketshare, starts experiencing "booming" growth as it rises from its 0% to 1%, to 5%, to 10%, to 20% etc.
The market, in our case, is both currencies and payment systems. We now have a decentralized and trustless alternative that enters the multi-trillion dollar market to get a slice from the centralized, trust-based / faith-based monopoly (established players owning 100% of the market).
Naturally, as the slice for bitcoin increases, the growth potential is explosive because you are starting from 0 and going upwards. Explosive/booming markets cannot be "contained" by figures like 9.2%.
The question is, what is the size of bitcoin in the larger scheme of things, where payment companies and banks have trillions in marketcap, combined global fiat (M3) is in the tens of trillions, precious metals are near 10 trillion usd, etc etc? It's nothing. It's near zero. If bitcoin gets even 0.1% of these markets, its own marketcap will be in the range of >100bn USD - a 20x increase, not a ...9% increase. Given that its a new option compared to legacy offerings, with new and different characteristics which actually cover human needs that the legacy systems cannot, this is very possible.
It sounds more "bullish" if you say BTC will go over 10.000$, but in reality it's the same thing as saying that BTC will capture 0.1% of the fiat currencies / payments market. The second sounds extremely plausible and reasonable as a target (due to its small size), the first doesn't - because people are used to its current price.