Disclaimer: This article is from the WeChat public account Dao Shuo Blockchain (ID: gudaozhuanlan), author: Lao Dao, authorized to reprint and publish the webmaster’s home.
Two days ago, I saw an article written by Jiang Zhuoer, a predecessor in the currency circle, "How much does it take for Bitcoin to rise to $100,000". In this article, the author uses the relationship between the amount of funds and the price in stock transactions to compare the relationship between the BTC market entry funds and the price, and gives a rough curve, but does not give a specific estimation result.
This idea is very interesting. Especially at the moment, high-level collective learning has brought a surge in the price of BTC, and the price of BTC has risen from US$7,500 to US$10,000 in just 24 hours. Many investors will be curious about the relationship between BTC's price increase and entry funds.
This relationship is difficult to accurately calculate, but to some extent a value can be roughly estimated.
As of the time of writing, the price of BTC is 9300 USD. I will use this price as a starting point to share with you how much money is needed to enter the market if the price of BTC rises to 100,000 USD from now on.
1. The relationship between the amount of funds and the rise in currency prices
First of all, we have to understand that when funds enter the market to buy BTC, the amount of funds entered and the price of BTC increase It is not a linear relationship, but it will be stronger than a linear relationship.
For example: now the price of BTC is 9300 USD. If someone buys BTC and makes a deal alone, the price may become 9400 USD; if two people buy BTC and make a deal, the price is possible Becomes 9500 USD or higher. As more and more funds enter, the transaction price will show a non-linear and rapid growth.
However, this rapid growth cannot last forever. When it reaches a certain turning point, the price will be too high, which will inhibit demand to a great extent. If you buy again at this time, its price will not change too much but only slightly.
The above process can be represented by the following curve:
The vertical axis of this graph is displayed Is the price of BTC, and the horizontal axis shows the funds entered. A horizontal line on the red curve corresponds to the inflection point of the curve.
Below this turning point, the price of BTC will rise rapidly with the increase of market entry funds; after this turning point, the price of BTC will gradually change slowly with the increase of market entry funds. The promotion of BTC prices by the market entry funds turned around at the turning point.
So when we say that the price of BTC is going to rise to 100,000, we have to see whether the current price of $9,300 is above the inflection point or below the inflection point at the corresponding point in this chart. If $9,300 is below the inflection point, a small amount of capital can push the price up quickly, and if $9,300 is above the inflection point, a huge amount of capital is needed to push the price up a little bit.
2. BTC supply is less than demand
According to existing data, 21 million BTCs have been mined 18 million, and among the 18 million mined , There are about 4 million pieces that are permanently lost, so only about 14 million pieces are actually in circulation on the market; the remaining 3 million pieces will be mined in the next 120 years, and the rate of new BTC generation will become slower and slower.
At the same time, the market value of the entire BTC as of the time of writing is only close to 170 billion U.S. dollars, equivalent to 1.2 trillion yuan, and the total market value of A-share Moutai is now close to 1.5 trillion yuan. RMB, which means that the market value of BTC is not as good as Moutai.
Moutai is only an investment target in the A-share market, while BTC is an investment target facing the world.
Therefore, the comprehensive BTC supplyIn response to its potential demand, I am optimistic that BTC will be in a situation where supply is less than demand in the long run. The current price of $9,300 is below the inflection point of the curve in the figure.
We assume that BTC will rise to $100,000 by the end of 2022 in the next three years. After calculating by the end of 2022, about 43,200 BTC will be newly produced, but this amount is negligible relative to the 14 million actually circulating, so we still use 14 million as the base.
3. How much money is needed for the BTC price to rise to 100,000 US dollars?
Then is there any difference between the increase in the price of the currency and the amount of funds in the process of the increase in the price of capital? What about the reference relationship? I did not find the direct link data, but I found an indirect link data.
In the great waterfall that occurred on the evening of October 23, a smash of 1,634.93 bitcoins within 5 minutes directly hit the price of BTC on Binance from 7913 to 7516, which was close to 400. US dollars. When we apply this linear relationship to pull orders, we can assume that a buy order of 1634 BTC can raise the price by $400.
With this ratio, to increase the price of Bitcoin from 9,300 USD to 100,000 USD, you need to purchase about 370,000 Bitcoins.
If we calculate with a unit price of 100,000 US dollars, it will take a total of 37 billion US dollars to buy these 370,000 bitcoins.
In this process, we have made assumptions and simplifications on many conditions, but I think this order of magnitude is closer to the actual amount of funds required.
So I am optimistic that at the end of 2022, if the price of BTC is to reach 100,000 U.S. dollars, the funds that need to be entered will probably be around tens of billions of dollars.