- Bitcoin’s hard limit is critical in terms of both money and investment.
- Bitcoin’s value has risen as demand has outpaced supply.
At the time of Bitcoin’s creation, Satoshi Nakamoto placed a minimal quantity of Bitcoins in existence. As a result, only 21 million bitcoins will ever be created. Nodes on the Bitcoin network enforce the hard cap, which is a limit embedded in the protocol’s source code.
Bitcoin’s hard limit is critical in terms of both money and investment. A successful store of wealth like gold and real estate, Bitcoin is difficult to expand in quantity. Bitcoin’s production grows more complex with each half until it becomes impossible.
Scarcity Will Skyrocket Price
Moreover, there is only so much of the oldest cryptocurrency globally: Bitcoin. To sum it up, Bitcoin’s value has risen as demand has outpaced supply. On the other hand, central government money has no strict boundaries, and governments may create as many dollars as they like as long as they don’t mind the inflation that results.
It has been highlighted recently by famous analyst MMCrypto that MicroStrategy has purchased $3.5B Bitcoin, followed by Terra, which has declared ambitions to buy $10B. As a reminder, there are only 21 million people in the world. As a result, the cost will skyrocket. However, the vast majority of the resources have already been extracted.
MicroStrategy bought $3.5b BILLION #Bitcoin in total. Now Terra announced plans to buy $10 BILLION. Remember: there is only 21 Million. Price will 🚀
— MMCrypto (@MMCrypto) March 25, 2022
More Bitcoin is needed when most of the currency is held in wallets for an extended period. To keep Bitcoin’s value high, more money on crypto exchanges chases fewer Bitcoins. The value of Bitcoin may shift dramatically if these major Bitcoin investors, dubbed as “whales” in contrast to the market’s “little fish,” add to their stockpile or sell a portion of their holdings for cash.