Analysis for $10 Million per Bitcoin Gets a Nod from Michael Saylor

In his analysis, Croesus explains that Bitcoin’s growth engine is its increasing scarcity, which will continue into the future, and that Bitcoin is designed to improve on gold’s strengths and solve its weaknesses.

He further argues that the market for store-of-value assets is separate from industries and that different assets are valued for different reasons. Some appreciate value, some maintain purchasing power, while others shrink over time. This implies that Bitcoin competes with all assets, including equities, real estate, and bonds, not just gold.

As per Croesus, the value of traditional assets is constrained by key variables in their respective valuation equations, such as future cash flows, discount rates, mortgage rates, and new supply. In contrast, the valuation of Bitcoin is driven by its scarcity and security, which is “absolute, incorruptible, and inviolable,” and is not influenced by new supply, interest rates, or economic factors.

As such, he makes a case for a $10 million per Bitcoin valuation based on the assumption that Bitcoin will, to some extent, replace gold as a global reserve asset. While this may seem like an overly optimistic prediction, Croesus notes that Bitcoin’s current market capitalization represents 0.05% of the global store-of-value market, which includes gold, real estate, and other assets. He added:

I believe Bitcoin’s full potential is to eat ~25% of the world’s value… while today it constitutes just 0.05%. That’s absurd. That means that I believe Bitcoin could 500x over the coming decades, in real (inflation-adjusted) terms.

As such, he concludes that Bitcoin’s value proposition as a superior store-of-value asset, with no counterparty risk, no dilution, and no inflation, makes it a compelling investment opportunity for long-term investors, especially in the face of the unprecedented money printing by central banks worldwide.

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