2023-11-24 10:10 |
Samson Mow, a pivotal figure in nation-state Bitcoin adoption and CEO of JAN3, has sparked a significant debate in the BTC community. Mow, known for his work on Bitcoin Bonds in El Salvador, made a bold statement on the social platform X, indicating a potential rapid surge in BTC’s value. He stated, “It has come to my attention that there are some Bitcoiners that don’t think Bitcoin can reach $1,000,000 in a matter of days/weeks after ETF money starts to flow in. They’re in for a pleasant surprise.”
$1 Million Per Bitcoin Not Insane?Further elaborating on his prediction, Mow referenced BTC’s historical growth, “In 2017 it took ~9 months for Bitcoin to go from $1k to $20k. The block subsidy was 12.5, there was a lot more BTC sloshing around on exchanges, mining was boiling the oceans, and there was zero institutional money coming in. $1k to $20k is 20x. $50k to $1M is 20x.”
Bit Paine, a Bitcoin analyst, provided a mathematical breakdown supporting Mow’s prediction. Paine’s analysis emphasized the rapid pace at which BTC price can grow, stating, “People acting like Samson Mow is insane for his $1M / BTC call forget how fast Bitcoin can happen – which is the exact mindset needed for such a thing to occur.”
Paine’s detailed analysis begins with the fundamentals of supply and demand. He calculates the new supply for the next cycle, estimating 136,000 BTC for the current epoch and 656,000 BTC for the next, totaling approximately 792,000 BTC.
Paine also considers the potential sale of old BTC based on the metric HODL Waves, estimating that 15-20% of the old circulating supply could come up for sale (as in previous cycles). In an extreme scenario, if 20% of old BTC were sold over the next four years, this would amount to approximately 3.8 million BTC.
Potential Sources Of CapitalTo achieve a $1 million valuation per BTC, Paine argues that a total capital influx of approximately $4.5 trillion would be needed. He identified two major potential sources for this capital.
First, Paine pointed to US retirement savings, which total approximately $35 trillion. A mere 5% reallocation from these savings to Bitcoin would amount to $1.75 trillion. Secondly, he considered US corporate treasuries, which hold around $1 trillion. If 10% of this were invested in BTC, it would add another $100 billion to the market.
Beyond these sources, Paine highlighted several other factors that could drive BTC’s price to $1 million. These include the potential for further adoption of Bitcoin by nation-states and the implications of new money creation over the next five years particularly affecting the $150 trillion global bond market.
Moreover, he pointed to the possibility of a reduced supply of old BTC coming to market due to the steadfastness of current holders. “The fact that […] an unprecedented number of BTC are in diamond hands – more of whom than ever believe in a Hyperbitcoinization narrative – could diminish that 20% hodl wave dip to 15% or even 10%.”
The decline of alternative cryptocurrencies and a refocusing of capital towards Bitcoin, along with the underperformance in the last cycle potentially leading to a delayed but potent market reaction, could be further catalysts, according to the analyst. Lastly, Paine noted the role of technological advancements, such as Taproot, in enhancing Bitcoin’s appeal.
At press time, BTC traded at $37,423.
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