Originally posted by Lance
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I am bullish on bitcoin because they combine the twin values of scarcity (the number of bitcoins in circulation will never exceed 21 million) and easy transaction capability. These twin features are not found in any other asset class as of date. Gold is scarce but not vey useful in carrying out transactions (try buying a loaf of bread with gold or convert gold to cash with ease). Cash provides easy transactions but is anything but scarce. In fact governments can print as much cash as they want. This is why Bitcoin is unique in having both the above desirable features.
Now the total value of gold (which is considered a safe haven asset) in the world is $ 7 trillion. I am totally optimistic that over few years, it is entirely likely that 2% of this value might move into Bitcoin. So Bitcoin should have a market cap of $ 140 billion. Divide this by 21 million and you get a figure of $6666 per Bitcoin (or roughly £5500).
That is roughly how I get my 10X figure (well less now as the price touched £800 today).
It is ofcourse possible that we may see lower prices in the interim but equally the price could run away upwards. And I am prepared to live with the former temporarily than be left with the boat that really sailed away..
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