The captain said: Bitcoin is the largest wealth redistribution in human history (Part Five)
Bitcoin will cause the largest wealth redistribution in human history, and no one can be exempt from it.
In the past decade, not buying Tencent stocks means I missed out on that money, and life goes on. However, if I hadn't bought a house in the past ten years, life would be quite tough now. Two people with the same income, one buying a house and the other not, will have a difference in asset scale by an order of magnitude. The essential reason for this gap lies in the seigniorage.
In our country, M2 has an annual growth rate of 20%. Over the past decade, aside from real estate, no other major asset class has consistently outperformed inflation. Therefore, not buying a house is equivalent to being subject to a 20% annual seigniorage tax, whereas buying a house exempts one from this tax.
The rationale for buying Bitcoin now is the same as buying a house ten years ago. An increasing number of foreign investors are viewing Bitcoin as a preferred asset for hedging and value storage, easily outperforming the world's average inflation rate. Moreover, Bitcoin is still in its early stages, with enormous potential for network effects and an average annual growth rate of 45%.
Two factors combined make Bitcoin's potential increase much greater than real estate ten years ago, although the downside is high volatility. So, one must maintain a good mentality, or they absolutely cannot withstand it. In fact, it's not just about one million dollars; even at three hundred seventy thousand dollars, it will have a significant impact on ordinary people.
Because when Bitcoin reaches a price of 602,000 dollars, it will match the current market value of gold (14 trillion USD). At that point, central banks will have to consider buying Bitcoin, incorporating it into foreign exchange reserves, and partially issuing fiat currency pegged to Bitcoin.
Some people say, how could central banks promote it? Suppression seems more likely.
That's right, initially there will definitely be suppression. However, central banks are in competition with each other; if the People's Bank of China doesn't buy while the Federal Reserve does, the Federal Reserve will benefit greatly, and there will be no say for the People's Bank of China at that point.
At that time, those who hold Bitcoin will not only be exempt from seigniorage taxes but will also share in the seigniorage tax revenues with the central bank. Those who do not hold Bitcoin will only continue to pay seigniorage taxes. The difference between holding and not holding will be greater than the current difference between owning a house and not owning one.
No one can escape the influence of Bitcoin, regardless of whether they are aware of it now. The only difference is whether one actively accepts it now or passively accepts it years later.
Everyone is in the game, either for it or against it.