https://s14.postimg.cc/9yjfwm9q9/Getty_Images-510365916.jpg

# Something I came across today should help put your mind at ease and also help put the bitcoin supply/demand dynamics into perspective.

While bitcoin has had major issues mounting any kind of a bullish run so far in 2018, that doesn't mean it can't, or that it won't.

To fully understand what I mean by that, think about the economics and the supply/demand structure that surrounds bitcoin.

There are currently roughly 17 million bitcoins in existence (actually much less than that as some are said to be lost forever due to lost keys).

Each coin is currently valued around $8k.

Do you not think there are more than 17 million people in the world that could afford to buy 1 whole bitcoin at the current price?

# Interesting, how many people out there could afford to do that?

While there are many out there that could make that purchase or purchase more than 1 coin, lets take a look at the number of millionaires on the planet to get some numbers on paper.

For some extrapolation, take a look at Credit Suisse's numbers, they say there will be roughly 54 million millionaires by 2019.

(Source: https://www.cnbc.com/2015/06/24/how-many-millionaires-in-the-world-it-depends.html)

Which means there would be ample investors out there with adequate resources to make something like that happen.

Now, if that were to happen, that would more than lock up the entire available float and corner the entire bitcoin market. 

The end result would be a non linear price reaction.

https://s14.postimg.cc/tt5hivmep/demand-vs-supply1.jpg

(Source: https://keydifferences.com/difference-between-demand-and-supply.html)

# Cool, but what is the point?

The above brings me to my main point, yes bitcoin has had a rough go so far, however, the limited supply is one of it's strongest selling points.

Well besides it's decentralized nature as well as it's non-correlation to any other asset class.

Bitcoin isn't really subject to changes in supply, instead it is subject to changes in demand. Which means that if there was ever an event that made bitcoin demanded by just about everyone, the price could soar to massive heights.

The fact that the mining reward is halving in 2020 is part of the reason McAfee is so bullish over the next few years as well. The supply gets even more constrained.

Which means...

If demand increases even slightly, prices go a lot higher. 

If demand increases significantly, prices go astronomically higher.

Stay informed my friends.

Image Source:

https://arstechnica.com/tech-policy/2017/11/bitcoin-rival-doubles-in-price-in-four-days-as-bitcoin-price-slumps/

Follow me: @jrcornel