Skeptics will argue against Bitcoin’s success tooth and nail, especially now that the cryptocurrency is stuck in the lower $7,000s with almost panic-instilling further dips every now and then. However, that hasn’t stopped proponents of the benchmark-crypto from predicting a sky-rocketing valuation for the asset in the foreseeable future.
Optimistic forecasts state that the controlled and gradually depleting supply of Bitcoin will eventually make it on par with the highest valued assets in the world.
Some even predict that Bitcoin could be on its way to becoming a Veblen good: an asset whose demand is primarily driven by their premium price (often as a means to show off one’s high socioeconomic status).
Adding more to these speculative theories, YouTuber and crypto-analyst The Moon (@themooncarl) prophecied earlier today that Bitcoin could be on its way to competing against diamonds, Ferraris, and other similar Veblen goods in the foreseeable future.
I think #Bitcoin might in the future behave like a Veblen good.
A Veblen good is something that is desirable, because of its high price. Examples are; Diamonds, Ferraris, Gucci etc.
Imagine when the #BTC price is above $1,000,000.
Will millionaires use Bitcoin to flex?
— The Moon (@themooncarl) December 4, 2019
Of course, such speculative forecasts are not new. BeInCrypto readers probably remember how a $700 quintillion asteroid recently sparked speculations surrounding Bitcoin’s bullish prospects over the long haul.
The underlying argument adding meat to these bullish speculations is simple economics, albeit purely hypothetical, hence shrouded by all sorts of uncertainties.
However, to explain it in short, the Bitcoin ecosystem will only ever have a finite number of coins available to the masses — 21 million of them to be more specific. As you already know, the supply of new coins entering circulation will be halved every four years, which is a native feature of the network to counter inflations.
If everything goes just as how Bitcoin creator Satoshi Nakamoto had envisioned the future for the asset, a gradually depleting supply of new coins will ensure a consistently growing demand for Bitcoin, thus giving it a never-diminishing upward momentum over the long haul.
With the BTC price skyrocketing and supply diminishing, Bitcoin in relatively large volumes could be affordable to only select socioeconomic status groups like millionaires. Of course, for that to happen, Bitcoin’s valuation will have to go ultra-high, possibly somewhere around $1M per unit or even higher.
If that’s what the future holds for Bitcoin, the optimistic proponents argue, that essentially translates into a hypothetical scenario wherein Bitcoin could replace luxury cars or diamonds as a preferred Veblen good for the rich.
Images are courtesy of Shutterstock, Twitter.
Images courtesy of Shutterstock, Trading View and Twitter.