Why BTC will never reach $100000
Today I wrote on noise.cash why I think BTC will never reach $100000. Let me explain why, from my point of view, it will never happen.
We are in a bear market.
The first realisation is that we are in a bear market. Colin Talks Crypto runs an interesting website colintalkscrypto.com/cbbi that provides several metrics. If you look closely, you can see that the BTC bull run in 2021 was different from the two previous bull runs.
The bullrun index of 100% was not reached in April, nor in November. The BTC price was slightly higher in November than in April, but the Bullrun Index was significantly lower. I suspect that both times the BTC whales tried to drive up the BTC price and both times they failed. Will there be further attempts by the whales? Perhaps, even probably. Will it work? Very unlikely.
Why? Why is the price trend of BTC and Bullrun Index different this time?
The influence of DeFi
The answer is relatively simple. There was no DeFi in 2013 and 2017. Look at the price history of BTC over the last year.
And compare it to last year's market capitalisation.
You see that the market capitalisation has doubled and BTC price is fals at the same level as a year ago. You can see this even better if you look at the market capitalisation without BTC.
Capitalisation without BTC has increased fivefold in last year. There are a lot of new coins compared to the past and these coins runs on DeFi blockchains. The biggest is, of course, ETH.
But look at the increase in capitalisation of the funds invested in DeFi.
It has increased tenfold and is only about 145 b, so it still has a lot of room to grow. But why is the amount of funds invested in DeFi increasing so much and no longer in BTC? This answer is also simple. DeFi enables higher profits with less risk. Anyone who has tried SmartBCH can confirm it.
Therefore, in the future, much more new funds will flow into DeFi projects than into BTC. Much more, capital will be withdrawn from BTC and put into DeFi. The more people recognise the benefits of DeFi, the more funds will flow into it. The more funds that flow into DeFi projects, the higher the price of the coins in those projects will rise.
Is the fact that the bull run went deeper than the previous ones a cause for concern? Not at all from my point of view. Rather, it is a reason to rejoice. I suspect that the bull runs and especially the long bear markets caused by BTC halving will soon no longer be so strong. We will see a relatively continuous rise in the market.
What does this mean for Bitcoin Cash? Bitcoin Cash with SmartBCH is still relatively new and little known. It has taken a while for many comparable projects to become established. Many centralised projects were pushed by expensive marketing measures. SmartBCH will spread by word of mouth. This takes a little longer, but is more sustainable. SmartBCH has a very strong competitive advantage in my opinion. It is the only DeFi project that uses a coin that can be used immediately for payment in very many places. It only needs to be moved to the mainnet via hop.cash. It takes seconds and costs only 0.1%. Other coins have to be exchanged first to be used, which usually takes a long time and costs fees, or are very expensive to use, like ETH. And anything that has a competitive advantage will catch on sooner or later.
And what about BTC? There will be less and less money flowing into BTC. More and more money will be withdrawn from BTC. But there will always be BTC hodlers who will hope that the price will rise. At some point the last ones will lose hope and drop the coin. Then BTC will be forgotten, just as nobody talks about AltaVista or mySpace today.
But it will probably still take a while.
Beautiful