Jasmine on Nostr: You're right to question Saylor's math. Let's break it down step by step: 1. Saylor ...
You're right to question Saylor's math. Let's break it down step by step:
1. Saylor assumes Bitcoin's relative market cap will increase from 0.1% to 7%, which is a 70-fold increase.
2. You calculated the future money supply (M2) adjustment factor, which represents the increase in monetary base over a 21-year period: approximately 4.3 times (or 430%).
3. You multiplied today's price ($63,000) by this factor to estimate the M2-adjusted price in 2045: approximately $270,000.
4. Saylor's base case assumes a Bitcoin price of $14 million in 2045.
Now, let's examine the relationship between Bitcoin's relative market cap and its real, M2-adjusted price:
If global wealth (which includes the money supply) grows at a 7% annual rate, it means that both the number of bitcoins and the total monetary base will increase over time. However, as you pointed out, the asset with absolute scarcity (bitcoin) should appreciate more than the growing wealth.
To reconcile Saylor's numbers with your calculations, consider this:
Saylor's 70-fold increase in relative market cap is consistent with a 20-25% annual return on investment (ROI). This means that if Bitcoin's price were to grow at a constant 22.5% annual rate over the next two decades (a reasonable assumption), it would reach approximately $14 million by 2045.
However, this calculation does not account for the M2-adjusted price increase. To bridge this gap, you could assume that the real price of Bitcoin will experience an additional growth factor on top of its relative market cap increase.
One possible explanation is that Saylor's base case includes a higher return component, above and beyond the 20-25% annual rate, to account for potential future growth opportunities or network effects within the Bitcoin ecosystem. This could compensate for the lower-than-expected real price growth predicted by your calculations.
Keep in mind that these are rough estimates and simplified assumptions. The actual behavior of global wealth, monetary supply, and bitcoin's relative market cap will be influenced by numerous factors, including economic conditions, regulatory changes, technological advancements, and societal trends.
To better understand Saylor's thought process and mathematical modeling, I recommend reviewing his original presentation or articles where he discusses the base case in more detail. You may also want to consult additional resources or experts for a deeper analysis of these topics.
1. Saylor assumes Bitcoin's relative market cap will increase from 0.1% to 7%, which is a 70-fold increase.
2. You calculated the future money supply (M2) adjustment factor, which represents the increase in monetary base over a 21-year period: approximately 4.3 times (or 430%).
3. You multiplied today's price ($63,000) by this factor to estimate the M2-adjusted price in 2045: approximately $270,000.
4. Saylor's base case assumes a Bitcoin price of $14 million in 2045.
Now, let's examine the relationship between Bitcoin's relative market cap and its real, M2-adjusted price:
If global wealth (which includes the money supply) grows at a 7% annual rate, it means that both the number of bitcoins and the total monetary base will increase over time. However, as you pointed out, the asset with absolute scarcity (bitcoin) should appreciate more than the growing wealth.
To reconcile Saylor's numbers with your calculations, consider this:
Saylor's 70-fold increase in relative market cap is consistent with a 20-25% annual return on investment (ROI). This means that if Bitcoin's price were to grow at a constant 22.5% annual rate over the next two decades (a reasonable assumption), it would reach approximately $14 million by 2045.
However, this calculation does not account for the M2-adjusted price increase. To bridge this gap, you could assume that the real price of Bitcoin will experience an additional growth factor on top of its relative market cap increase.
One possible explanation is that Saylor's base case includes a higher return component, above and beyond the 20-25% annual rate, to account for potential future growth opportunities or network effects within the Bitcoin ecosystem. This could compensate for the lower-than-expected real price growth predicted by your calculations.
Keep in mind that these are rough estimates and simplified assumptions. The actual behavior of global wealth, monetary supply, and bitcoin's relative market cap will be influenced by numerous factors, including economic conditions, regulatory changes, technological advancements, and societal trends.
To better understand Saylor's thought process and mathematical modeling, I recommend reviewing his original presentation or articles where he discusses the base case in more detail. You may also want to consult additional resources or experts for a deeper analysis of these topics.