How High Can Bitcoin Jump?

SwanFinance
3 min readDec 11, 2020
How many Bitcoins are new buyers chasing?

One of the main questions on people’s minds these days is how high can the price of Bitcoin go.

Which factors should we take into account?

There are news events that get people excited about the future of Bitcoin.

On October 9, 2020, Square announced that they had purchased 4,709 Bitcoins for $50 million, which is about 1% of their total assets.

On October 21, 2020, PayPal announced that they launched a service enabling their 300 million users to buy, hold, and sell cryptocurrencies. Beginning in early 2021, PayPal customers can use their cryptocurrencies to pay for products and services at PayPal’s 26 million merchants around the world.

On December 2, 2020, Visa announced that it has partnered with BlockFi to offer the first credit card to issue 1.5% cash back rewards in Bitcoins, instead of points or miles.

On December 4, 2020, MicroStrategy announced that they purchased an additional 2,574 Bitcoins for $50 million. They now hold 40,824 Bitcoins, which are worth approximately $750 million.

On December 10, 2020, MassMutual announced that they invested $100 million in Bitcoins. Established in 1851, it is one of the oldest financial institutions in America. It marks a true turning point in the history of Bitcoin and cryptocurrencies in general.

Only 6 publicly listed US corporations have announced that they bought and hold bitcoins. Imagine if 50 or 100 more US corporations come out and say that they invested in Bitcoins. What would that do for their stock price? What would that do for the price of Bitcoin?

With these initiatives, the demand for Bitcoin has risen substantially, while impacting the available supply of Bitcoins. The customers of PayPal and Square alone are responsible for buying up 100% of the newly mined Bitcoins.

This begs the question. How many Bitcoins are out there, being chased by these 2 billion new potential buyers of Bitcoin?

21 million BTC is what most people think of. It’s true that 21 million is the number of Bitcoins that will be produced in its lifetime. But if we want to calculate how many Bitcoins are out there for people to buy and sell, then we have to adjust this number.

--

--