Bitcoin Could Hit a 10% Adoption Rate by the End of the Decade
“Hands of lettuce” is a phrase some people use to describe an investor who sells their Bitcoin at the first sign of trouble, often at a loss. An example of its use in a sentence might be: “Elon Musk has lettuce hands because he sold 75% of Tesla’s Bitcoin holdings in Q2.”
The sentence above is more than an example; it happens to be the truth. During Tesla’s quarterly earnings webcast last week, Musk admitted to throwing away some $936 million worth of Bitcoin to raise funds over fears of an economic setback from pandemic shutdowns in China. The managing director said he sold for a “realized gain”, but some people online have serious doubts.
To be fair, Musk added that he’s open to buying more in the future. But for many Bitcoin fans and advocates, his decision to sell feels like a betrayal, especially since he continues to hold the Dogecoin meme coin, created in 2013 as a joke.
When Tesla originally announced in February 2021 that it had bought $1.5 billion in Bitcoin, the crypto community saw this as signaling the start of a trend of large corporations and other institutional investors holding the digital asset on their balance sheets. Enthusiasm only increased the following month when the electric vehicle (EV) maker announced that it would start accepting Bitcoin as a form of payment.
These plans lasted just over a month before Musk suspended Bitcoin payments. The reason? Mining the asset, he claimed, consumed too much energy and emitted loads of greenhouse gases.
We now know that Musk’s concerns, while valid, were and are not based on the truth. Some might call them FUD, or fear, uncertainty and doubt.
Bitcoin miners are the “buyers of last resort” when it comes to sustainable energy
Musk is right about one thing: Bitcoin mining is energy intensive, there is no doubt about it, and it will only become more energy intensive per coin as the difficulty rate increases.
Where he is wrong is in saying that Bitcoin mining is dirtier than other industries. The truth is that the use of renewable, carbon-free energy by institutional-sized miners has proven to be higher on average than any major country on earth.
Below are the results of the second quarter survey of members of the Bitcoin Mining Council (BMC), of which HIVE Blockchain Technologies is a founding member. According to the data, sustainable energies (wind, solar, hydro, geothermal, etc.) represent an impressive share 66% of the energy mix of BMC members. For the entire global Bitcoin network, it’s almost 60%. No G20 country comes close to using this level of renewable energy as a percentage of total energy consumption.
And as many others have pointed out, myself included, large-scale bitcoin miners are very often the buyers of last resort when it comes to renewable energy. They regularly consume much of the electricity that would otherwise have been wasted during off-peak hours. This makes sustainable energy more competitive and will encourage the further deployment of wind and solar.
Dennis Porter, CEO of the Satoshi Action Fund, whose mission is to educate policymakers on the merits of Bitcoin, goes one step further. Bitcoin mining, he said in a recent tweet, will one day be “such an important part of the network that if they try to ban it, we’ll all be without power.”
Despite all this, Tesla still has no plans to start accepting Bitcoin as a form of payment again. The only digital asset it accepts is Dogecoin, which has a market capitalization of only about 2% the size of Bitcoin.
Shanghai lockdown a second-quarter challenge for Tesla
Nevertheless, we continue to love Tesla. The shutdowns in Shanghai were a huge challenge for the automaker in the second quarter, with profits down from the previous quarter. Now that the factories are back up and running, we expect to see stronger results when the company reports on the third quarter.
Like tech stocks and luxury goods stocks, of which Tesla is considered a member, stocks have traded in bearish territory this year due to rising rates, recession fears and supply chain issues. world.
Global Bitcoin Adoption Will Reach “Parabolic Phase” in 2030
Tesla’s suspension of bitcoin payments raises questions regarding the digital asset’s viability as a widely accepted currency and medium of exchange. More businesses and retailers will take your Bitcoin, but so far relatively few transactions are made using crypto. According to a source, Bitcoin is currently trading only about seven transactions per second against 1,700 for Visa and 5,000 for Mastercard.
But it won’t be like this forever, according to the latest research from blockchain infrastructure firm Blockware Solutions.
In a June report, the company examines the historical adoption trends of a number of past disruptive technologies, including automotive, radio, internet, smartphones, and more. Although the speed of adoption in these cases differed, one thing was certain: once adoption reached 10% of the population, growth became “parabolic” as penetration shifted from “early adopters” to “early majority” and finally to “late participation”. majority.”
Long story short, Blockware predicts that global Bitcoin adoption will top 10% in 2030. After that, growth could go parabolic, eventually reaching 80% of the population by the 2050s.
As a reminder, Bitcoin supply is capped at 21 million. Divide this between 8 billion people, this is what the world population is expected to reach later this year. The model above suggests that owning a single whole Bitcoin and holding onto it for the long haul could end up generating not just life-changing wealth, but generational wealth.
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Originally published by US Global Investors on July 25, 2022.
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