In a recent YouTube video, Joe Burnett, Senior Product Marketing Manager at Unchained Capital, made a bold forecast regarding Bitcoin’s valuation, suggesting it could reach $750,000. Burnett argues that many market analysts are failing to recognize Bitcoin’s true potential in the current cycle because they are not considering its evolving market context. Instead of just comparing Bitcoin’s performance in this cycle to its historical data, Burnett emphasizes the need to view Bitcoin in relation to its position within the total global wealth.

Burnett brings up the HODL model created by the Rational Root, which he discussed in the podcast “What Bitcoin Did.” This model points to a significant shift in 2020, coinciding with Bitcoin’s third halving event. This halving event reduces the number of new bitcoins generated and given to miners. According to Burnett, the model highlights a decrease in the liquid supply of Bitcoin and an increase in long-term holders. This shift has led to Bitcoin becoming more of a tightly held asset, rather than being freely circulated.

Burnett challenges the traditional view of gold as a store of value by pointing out its flaws in economic mechanics. Gold has an annual supply increase of 1% to 2%, leading to continuous sell pressure. In contrast, Bitcoin’s halving events create a positive feedback loop, reducing the new supply every four years and driving price appreciation. This built-in scarcity inherent in Bitcoin contributes to its value over time, unlike gold which faces diminishing appeal as an investment.

Zooming out to a global scale, Burnett references the vast total global wealth of nearly a quadrillion dollars. In comparison, Bitcoin’s current market cap is only a fraction of this wealth. He suggests that Bitcoin’s market share is poised for significant growth and could potentially command a substantial portion of global wealth. This differs from more conservative estimations that barely see Bitcoin crossing the $100,000 mark in the foreseeable future.

Burnett challenges the idea of “diminishing returns” and cites Michael Saylor’s quote, “All your models will be broken.” He believes that anything below the size of gold as a valuation for Bitcoin is “absurdly early.” This critical analysis of Bitcoin’s potential reveals a new perspective on its future trajectory and underscores the need to consider Bitcoin’s evolving market context and intrinsic value in a broader global financial ecosystem.

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