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$1M Bitcoin - The Inevitability

$1M Bitcoin.. That's crazy! Find out why $1M per Bitcoin isn't only possible, but inevitable

$1 Million Bitcoin: Analyzing Historical Patterns and Future Potential

Bitcoin's surge past $106,000 has sparked renewed interest in the possibility of reaching the ambitious $1 million milestone. This analysis examines this inevitability through the lens of monetary history and the fundamental characteristics that drive currency adoption. I will make the case that $1M is inevitable, and further than that, I believe $10M is in sight, and closer than many think.

The Evolution of Hard Money

Throughout history, societies have consistently gravitated toward harder forms of money – currencies with limited supply and resistance to inflation. This pattern provides valuable context for understanding Bitcoin's potential trajectory. Before we continue, let me make one thing clear:

History has never been merciful to societies with soft money in favor of those with sound money.

Not once.

Understanding Hard Money

The hardness of money refers to the difficulty of producing more of it. This characteristic has historically given certain currencies significant advantages over their "softer" counterparts. The global gold market, valued at approximately $8 trillion, demonstrates the enduring appeal of hard money.

Lessons from History: The Chinese Silver Standard

China's experience with the silver standard in the early 20th century offers valuable insights into monetary evolution. While initially providing some protection during the Great Depression, China's reliance on silver ultimately proved problematic. The destabilizing effects of U.S. silver purchase policies in the 1930s forced China to abandon the standard in 1935, illustrating the vulnerabilities of even traditional hard money systems.

The Roman Denarius: A Cautionary Tale

Perhaps the most infamous example of currency debasement comes from Ancient Rome. The denarius, introduced around 211 BCE, began as a silver coin containing approximately 4.5 grams of pure silver. This robust currency helped facilitate Rome's expansion and commerce across its vast empire.

However, successive emperors, facing mounting military costs and public expenditures, gradually debased the denarius by gathering coins, melting them, and throwing in bits of other metals (reducing the % of precious metals). By the time of Marcus Aurelius (161-180 CE), the coin contained only 75% silver. Under Septimius Severus (193-211 CE), it fell to 50%, and by the 270s CE, the denarius was nothing more than a bronze coin with a thin silver wash, containing less than 5% silver.

This debasement had catastrophic consequences:

  • Widespread inflation and economic instability
  • Loss of public trust in the currency
  • Breakdown of long-distance trade networks
  • Increased bartering and local economic isolation
  • Contribution to the overall decline of the Roman Empire

The Roman experience demonstrates a crucial lesson: when rulers have the ability to debase currency, they invariably do so to solve short-term problems, creating far greater long-term consequences. This pattern has repeated throughout history, from Ancient Rome to modern Venezuela, making Bitcoin's mathematical scarcity and complete resistance to debasement particularly significant.

The Dollar Era and Its Implications

The U.S. dollar's dominance emerged through the gold standard and Bretton Woods system, where international currencies were pegged to the dollar, which was in turn backed by gold at $35 per ounce. The 1971 transition to a fiat system marked a significant shift in monetary history, creating conditions that would later contribute to the demand for alternative stores of value. It is important to note that although the gold standard was not officially dropped until 1971, the US dollar's convertibility to gold at banks was halted in the 1930s, which was effectively the end of the gold standard.

Bitcoin: The Next Monetary Evolution

Bitcoin represents a superior form of perfectly hard money, offering many advantages over traditional alternatives:

Core Strengths

  • Mathematically guaranteed scarcity with a maximum supply of 21 million coins, with new coins introduced at a fixed rate that accounts for number of miners
  • Unprecedented divisibility and instant global portability
  • Decentralized structure ensuring transparency and manipulation resistance

Analyzing the Path to $1 Million

The journey to $1 million Bitcoin involves several key considerations:

Supporting Factors

  • Bitcoin's historical pattern of exponential growth
  • Growing institutional adoption and integration
  • Global monetary policy developments potentially enhancing Bitcoin's appeal

Timeline and Projections

Current market analyses suggest varied timelines for Bitcoin's growth. While VanEck projects $180,000 by 2025, I personally think they aren't bullish enough. With rapidly growing institutional adoption, exponential interest in the political realm, and countless countries around the world proposing Bitcoin strategic reserves, I would be hard-pressed to see Bitcoin anywhere below $250,000 by the end of 2025. Some of these factors could even propel Bitcoin past that $1 million milestone in the next 12 months!

Conclusion

While Bitcoin's path to $1 million may seem far-fetched for "magic internet money," its fundamental characteristics as the hardest form of money in history provide a strong foundation for long-term value appreciation. The convergence of institutional adoption, technological advancement, and global monetary trends can and will propel Bitcoin to and far past this milestone. Fiat is a sinking ship and Bitcoin is the ark that will save societies.

Note: This analysis draws from various academic and industry sources, including research from financial institutions, economic historians, and cryptocurrency experts. Market projections are speculative and should not be considered financial advice.

Works Cited

Ammous, S. (2018). The Bitcoin Standard: The Decentralized Alternative to Central Banking. Wiley.

Brandt, J. (2017). China's Great Depression: Silver, the New Deal, and the Collapse of Chinese Agriculture, 1931-1935. Journal of Economic History, 77(2), 521-548.

Eichengreen, B. (2011). Exorbitant Privilege: The Rise and Fall of the Dollar and the Future of the International Monetary System. Oxford University Press.

Friedman, M., & Schwartz, A. J. (1963). A Monetary History of the United States, 1867-1960. Princeton University Press.

Nakamoto, S. (2008). Bitcoin: A Peer-to-Peer Electronic Cash System. Retrieved from https://bitcoin.org/bitcoin.pdf

Popper, N. (2015). Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money. Harper.

Selgin, G. (2015). Synthetic Commodity Money. Journal of Financial Stability, 17, 92-99.

Tapiero, D. (2023). The Bitcoin Standard: The Decentralized Alternative to Central Banking. In Global Macro: Theory and Practice (pp. 267-288). Wiley.

VanEck. (2024, November). Bitcoin Price Prediction Report. VanEck Research.