Those with a keen interest in bitcoin are accustomed to dealing with large numbers. A fixed monetary supply of 21 million, 18.5 million of which has already been generated; 100 million satoshis per coin; a market cap of over $600 billion driven by a 9,000,000% rise in value in the 2010s.
On and on it goes, an endless series of figures forming digital rain like the iconic scene in The Matrix. While bitcoin is about much more than numbers – namely privacy, liberty, and fairness – the world’s favorite cryptocurrency is destined to forever be synonymous with integers.
The question on everyone’s lips, however, is concerned with just one of these numbers: how valuable bitcoin can become. A new paper by AAX Research explores this question at length.
Schooling Investors on Bitcoin
Entitled “Bitcoin in 2021” and ostensibly compiled to provide investors with food for intellectual thought, the 23-page document from AAX summarizes the asset’s history as an investable commodity and analyzes metrics such as trade volume and liquidity to suggest what might be on the horizon. The paper also looks at growing institutional support for the currency, with reference to the actions of major players like Grayscale, PayPal, and Square.
While many readers might understandably sift through the pages in a bid to learn how valuable bitcoin might be a year down the line, such papers are – of course – inexact sciences. Nonetheless, they are useful for providing context and summarizing the various factors that might coalesce to push bitcoin in one direction or another.
Reflecting on the events of 2020, for example, the paper perspicaciously observes that “soon after the first $1,200 stimulus checks were handed out in the U.S. to reduce the immediate impact of mandatory lockdowns, Coinbase and other cryptocurrency exchanges noticed a significant increase in deposits of the exact same amount by US clients.”
As we know, bitcoin enjoyed major highs and lows last year. In March, in…