I’ve thought pretty deeply about the idea of what bitcoin might look like in the future throughout the past few months, and I hope that what I share next is a good hypothesis on that future and what the next decade or two will look like for everyone in the space. Essentially, I think of it as there are 4 major “types” of investors and speculators that we will see over bitcoin’s entire lifetime before reaching a point of stability and low volatility / global adoption.
These investors and speculators are the innovators of bitcoin who mined it and the very lucky, tech savvy individuals who happened to come across the space (and even a minority few brave retail individuals who wanted to try the invention out). This period is the highest risk period for bitcoin, but also the most rewarding.
This is the basic retail phase. Here, the general public became aware of bitcoin and began to speculate on it and/or invest for the future as a hedge against irrational fiscal policies. These people are anywhere in the range of your grandma to college students to upper class families. This was the major pivotal change needed for bitcoin and by far the big, ultimate test for its survival since its existence. If the public believed in it enough and trusted this programmable form of money, then there could actually be a future where state and money are disjointed. This is also a risky phase within bitcoin’s lifetime, but it was bound to work out given that people would more than likely manage to educate themselves on what it is and what it stood for.
Institutional adoption. This is where we are now. The narrative is still being driven to the retail from phase 2, but institutional investors are now serious and very public about their interest in bitcoin. They are the main drivers of the price action that has been occurring and that will come. This is a much safer period for investing in bitcoin, because it is being legitimized as we speak by these big institutional players. Time will tell but it seems like volatility is also decreasing, and this is solidifying the entire asset class itself. There is lower potential reward, but it is safer than investing in either phase 1 or phase 2. We will more than likely see bitcoin at low to mid six figures (100-300k) within the next 12-24 months. Once this phase has concluded, most retail will not be able to acquire one bitcoin or even a large fraction of a bitcoin within their lifetimes. We will see this play out in the coming months, as it already seems highly unlikely a majority of the population could ever spare this amount of capital for a single bitcoin.
Countries will be the focus of this phase. I understand they were already acquiring and buying the asset before this point, but they are the main attention now. Institutional adopters and retail will still be buying (these phases overlap consistently throughout time), but governments will be the main focus during this time period. The bitcoin being mined and the bitcoin left on exchanges will be fought over between countries (not literally, hopefully) as different countries attempt to grab onto as much of the greatest reserve currency of all time as possible. Countries with more bitcoin will have more power. At this point, bitcoin has played out through all tests and is legitimized. Only a bug within the program, which has a very, very low probability of occurring, or something like a solar flare that shuts down the internet could stop bitcoin. Institutions and countries are attempting to grab bitcoin in the 7 figures range. Depending on how this phase goes, bitcoin might become the global currency, pushing it much higher. This will depend on lightning network and other technologies (like biometric integration) to make complete. If this occurs, humans will have a free form of money, and governments will want bitcoin flowing through their financial system and economy to be a more highly developed nation.
These phases and investor classes will overlap at different periods, but they merely represent a shift in the main focus of who is buying and acquiring bitcoin. Hopefully, you think this is useful and interesting, even if I am ultimately incorrect about phase 4. I just wanted to share my thoughts. Please let me know what you think and if you have any suggestions or ideas on what the future might look like for the greatest form of money of all time. We are currently in the early stages of phase 3. Acquiring and hodling as much bitcoin as possible is critical right now. Do your research, and see if you believe what I believe. Good luck to everyone. Thank you for reading.