All Bitcoin In Existence is Now Worth Over A Trillion Dollars!
On Friday, February 20, 2021, the market capitalization, the value of all bitcoin in existence, passed one trillion dollars. This occurred after bitcoin surged from fifty three thousand dollars to fifty six thousand dollars. The point where bitcoin passed the trillion dollar mark was when it climbed above 53,804 dollars. This occurred at 11:09:41 AM Eastern Time (coinmarketcap.com).
Right now. at press time (13:18 ET 2/20/2021), bitcoin is worth 1.06 trillion dollars. One coin will set you back 56,930 dollars. That is a lot. For comparison, at the same time last year one bitcoin was worth only 9,612 dollars (tradingview.com). That is an increase of over a five hundred percent! Try to find a return like that anywhere else! Last year, at this time, ten thousand dollars seemed like a lot. Now that looks like a bargain.
But the price of bitcoin is a little scary. Why? Well remember 2017? The price of bitcoin started January 2017 at one thousand dollars and by December 2017 peaked at nineteen thousand dollars. By December 2018 the price was 3100 dollars (tradingview.com). There are many signs that point to this time being different, such as the increase in price being driven by institutional investors, but that does not rule out the possibility.
On January 1, 2021, the price per bitcoin was 29,000 thousand dollars. If this year follows the 2017 pattern, by Christmas of this year, bitcoin will have gone up 1900 percent to 556,700 dollars! That is a market cap of over ten trillion dollars! But then the price will crash back down to 87,900 by December 2022. Hopefully, this will not happen. Hopefully, the price will just steadily increase to a high plateau. But that might not happen. That is why each increase in price is both a reason to celebrate, and a cause for concern. When prices go up too fast, they usually go down just as fast.
Those are illustrations of the two possible scenarios. But who knows, something entirely different might happen. Bitcoin may never reach five hundred thousand dollars, for one thing. All that is known now is that the increase past one trillion dollars is a major milestone. Satoshi Nakamoto is now worth sixty billion dollars, if they are still alive. Their invention basically created a one trillion dollar asset out of thin air, or rather computer code. That is amazing. It only took twelve years.
Bitcoin is now in the trillion dollar club along with Microsoft, Apple, Alphabet, Amazon.com. Only seventeen countries have a larger or equal economy (GDP of over one trillion per year). Bitcoin already went up three hundred dollars to 57,200 while this was being written. This is an exciting time. A 1.9 trillion dollar stimulus bill is in the works. It is very necessary, and there is no way around it, but it will cause more inflation. This makes bitcoin, with its fixed supply, more attractive. If the stimulus bill passes, more gains for BTC might be in store.
Although the price is very high, bitcoin is still scarce. Only 900 new bitcoins are mined each day (on average), and that number is set to be cut in half in 2024. But, if everyone in the US alone wanted to buy a little bit of bitcoin every day (328 million people), assuming that only newly mined bitcoin was for sale, there would only be enough bitcoin for each person to get 0.00000274 BTC. That is only fifteen cents. So bitcoin is very scarce. All we have to do is wait until everyone want s piece of the bitcoin pie. Then the price could go up. Everything is supply and demand, and with bitcoin supply is tiny.
This is not financial advice. Bitcoin is still very volatile, so do not invest more than you can afford to lose.
Featured image courtesy of pixabay.com