Couple of things before I get into this. First, none of this is investment advice. I’m an idiot and you really, really shouldn’t listen to my opinions. Second, if you hold me accountable to any of this then the joke’s really on you, bro.
Now let me spit some facts.
The Federal Reserve estimates that 31% of all the US dollar bills in circulation today are $100 bills. This is a 20% from 15 years ago. (US Fed)
80% of all US $100 bills are held overseas, according to the Chicago Fed Board, up from 15-30% in 1980. (Chicago Fed)
Looking at the total US dollar bill circulation, that means that $100 bills stored overseas accounts for ≈64% of the total value of printed US currency. This represents a hair (few hundred million dollars) over one trillion dollars in value (that’s $1,000,000,000,000 or one thousand billions of dollars) sitting in $100-denominated bills parked overseas.
Why are people keeping hordes of $100 bills overseas? Lots of reasons. I’d guess mostly to do with crime on one hand and local economic instability on the other. $100 bills are obviously the most efficient way to store, transport, and transact in cash that you want to keep out of the regular financial system. $100 bills take up the least space, are universally accepted, and are well made enough to keep their integrity for years.
But crypto-assets are better than physical bills on each and every count.
So that $1 trillion in $100-denominated bills stored overseas? That’s the baseline price target for Bitcoin’s market cap. The max number of Bitcoins that can be mined is 21 million. So assuming none get lost (1/4-1/2 probably have been), that sets a price target for Bitcoin at ≈$51,000 before accounting for any other use cases beyond displacing $100 bills as a store of value overseas.
I think Bitcoin will be very price volatile but generally trend upwards until reaching something within spitting distance of that price point and then become relatively price stable for the future. And I think it’ll be Bitcoin specifically (rather than say Monero) because it has the biggest headstart and most “brand recognition” among all crypto-assets, not unlike the US dollar relative to other fiat currencies. To put it in perspective, Bitcoin makes up about 65% of the total crypto-asset market cap, depending on the day.
I’m gonna be buying and HODLing all the way to $51k.
My DMs are open for any hedge funds that want me to come in and run things from now on.