Bitcoin recently caught fire with institutions, corporations, and hedge funds in 2020 as a defense strategy to protect wealth from the non-stop money printing machine that turned on after Black Thursday.
The store of value and safe haven report primarily focuses on the cryptocurrency’s hard-coded scarce supply of just 21 million BTC. However, a longtime crypto attorney and alum from Fidelity Investments says investors shouldn’t worry about the cost per coin due to a general supply bottleneck and that the remaining units can be re-valued and further divided if necessary because the asset is divisible. Here’s why these types of conversations are the first signs of the evolution of Bitcoin’s new narrative – where it becomes not only a “store of value” but also a “unit of account”.
Don’t let $ 20,000 per BTC price or tight supply put you off. Bitcoin can be “re-rated” in Satoshi
The human brain is hardwired to recognize patterns and remember to find the path of least resistance, reduce life’s challenges, and extend life expectancy.
It is precisely for these reasons that assets often trade around rounded numbers like $ 10, 1,000, $ 10,000, and $ 20,000, or repeating numbers like $ 18,888 – a number you’ve probably seen on the price sticker recently.
Related reading | Bitcoin Math: Why 21 Million BTC Was Chosen
As simple as it sounds and it is because it takes just a few finger movements to place the order and how little thought goes into ordering such an order.
Have you ever wondered why Bitcoin has been spiked twice now, just before $ 20,000? This is because it takes smart money a few seconds longer to place orders with rounded numbers, leaving behind the lazy retail investors who haven’t planned properly.
Bitcoin price often trades at rounded or repeating numbers | Source: BTCUSD on TradingView.com
People also like whole numbers rather than a fraction of something, which is exactly why investors turn to altcoins when Bitcoin gets so expensive.
However, Nic Carter, a former crypto user and proprietor of Lockean, says that while digital scarcity is a key narrative for Bitcoin, there can never be a shortage of extremely rare assets. And here is why.
It is true that only 21 million bitcoin will ever exist. Each BTC is divisible into one hundred million “satoshi” – the smallest unit of measurement of the cryptocurrency, which corresponds to 0.00000001 BTC.
If or when Bitcoin becomes the global reserve currency and currency revolution, or such a scenario in which BTC becomes the primary store of value, each coin can be further “re-valued” one after another or even further decimalized if necessary.
Related reading | Losing a decade-long trendline, the dollar could skyrocket Bitcoin
According to Joe Weisenthal, TV editor for Carter and Bloomberg, theoretically only a single BTC could support an entire market if it were broken down enough often.
Before new investors start investing in altcoins like the last crypto bubble, think again before you let the fact that you can’t own a whole bitcoin scare you off. What tiny chunk of BTC you can buy now could surpass thousands of other coins if it reaches its full potential.
The comments are particularly noteworthy as the store of value narrative gradually fades into the background of the “unit of account” narrative that could transform cryptocurrency from safe haven to global reserve currency over the next decade.
Featured image from Deposit Photos, Charts from TradingView.com