In this article, people, I’m choosing to divert my focus away from EOS and instead directing my attention to Bitcoin (BTC). “Oh no”, I here you say, but I do this for good reason because while Bitcoin continues to hold its market dominance and hovering around the 52% level (source: https://coinmarketcap.com/charts/), the movement in bitcoin prices continues to have an effect on EOS values whether we like it or not.

Until that rupture of “de-coupling” truly occurs, where EOS values and movements aren’t absolutely contingent upon BTC, we have to live with that fact. Yes, there have been “blips” along the way, where we have a temporary parting of the ways. Just think back to when we were all having nose bleeds as the price of EOS crashed through the $20 (US) barrier and BTC was tanking. But otherwise, the general trend of being inter-twined, for now, seems to remain the same. As Shakespeare put it of those 2 tragic lovers:

“From forth the fatal loins of these two foes,

A pair of star-cross’d lovers take their life”

(Source: Prologue, Romeo and Juliet).

But before we reach that point, let’s not act like selfish children turning our backs on the parent that spawned us. Because if we realize a little known point about the economics of Bitcoin, it really could have a profound effect on the values not just of BTC but on EOS too. So let’s get “down to the dirty” and drill into into the details of what I’m talking about.

Let’s begin things with starting with 2 “facts“:

1. Bitcoin has a maximum cap of 21 million BTC.

2. There are now 36 million millionaires in the world

(source: http://www.businessinsider.fr/us/worlds-millionaires-own-nearly-half-the-total-wealth-2017-11).

If we assume these “facts” are unquestionable, it means that there’s a potential 0.583 BTC (or just over half a Bitcoinn) per millionaire in the world right now. Small change for these guys when the price of 1 BTC continues to hover between $6,500 – $7,000 at the time of writing. However, these figures tend to get even more “juicy” when we consider the theoretical supply of Bitcoin available as opposed to its ACTUAL supply.

According to recent studies, around 20% of all BTC is actually “lost” (source: https://www.newsbtc.com/2018/07/07/lost-bitcoin-is-giving-birth-to-an-emerging-crypto-recovery-industry/). Or worse still, that figure rises to 36%, if you believe the title of this article: https://coindoo.com/36-of-btc-in-circulation-is-gone-or-lost-forever-study-says/. Sloppy journalism and headline grabbing titles aside, let’s assume for argument’s sake a figure of 25%.

With a quick bit of maths, that means there are just under 16 million Bitcoins actually available – or 15,750,000 to be precise. If we take this new figure and divide it between ALL the millionaires in the world, we now have a new figure of 0.4375 BTC available per millionaire. And this doesn’t even include those Bitcoins still to be mined.

Classical economics teaches us that the price for any commodity is dictated by the “laws” of supply and demand. If that supply is now re-adjusted, the true “value” of Bitcoin has an “undisclosed” premium of 25%. For how long this will remain hidden, I am not sure. Maybe the “markets” have already factored in this price. But the one thing I can say is this: if you already have half a bitcoin in your stack, then you’re not only already a “member” of the 36 million “millionare” club, but may look at the BTC/EOS de-coupling in a different light. Star-cross’d lovers indeed. 🙂

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Responses

  1. Zeus69

    Thank you Mr David Cooper, interesting analysis indeed, I better get me some BTC, LOL With all my investment in crypto, which is mainly EOS doesn’t even come close to .4 of a BTC, I can only wish but maybe just maybe one day EOS will do the old switcharoo, 🙂
    Regards,
    Mark (Zeus69)

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  2. CryptosDecrypted

    Very interesting article David. The decoupling of EOS or indeed any other crypto from BTC is likely years down the road. For now, BTC essentially rules them all. The limited supply of BTC, the lost coins, the pending halvening in 2020 and large-scale institutional investment in BTC all paint a very bullish long-term (3-10) BTC price outlook. Of course, the 36 million figure of millionaires is a bit misleading as it implies that all of them will be interested in holding BTC or any single asset entity which simply won’t be the case(a certain % sure and given the extremely limited supply….).

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    1. David Cooper Post author

      Thanks CD and you’re right I should have mentioned halving (which for those not sure simply you means you get 50% less BTC as a block reward). Maybe a subject for another article (with my usual take on things, of course). And I simply used the millionaire figure to put things into perspective and do the maths. Equally, given that BTC supply is fixed and the number of millionaires isn’t, I wonder how many there will be in 10 years time? If the bullish assertion is correct, certainly a few more than there are today.

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