- Between 2017-2020 the bond markets collapses, inflation and interest rates rise.
- US stock markets return to historical P/E ratios of 16 or less. From the mid 60’s to the early 80’s P/E ratios went from mid 20’s down to 7. The S&P 500 went from 700 to 300 during this period. The Dow from 7358 to 2000.
- The price of bitcoin will rise as a decentralised version of protectable wealth. Gold and Swiss Francs will do well too, but not as well.
- This rise will lead to euphoria around Bitcoin and it will begin to appreciate faster than the rate of user adoption, much like the 2013 Bubble.
- Governments, the general public and large funds will take part. It will correct dramatically but still be at least 3 times the previous trough which was $220 at the start of 2015.
- At this stage, when bitcoin leaves it's longer term trend line, and s&p 500 stocks seem to be trending towards record lows(pe5-15), it will be the time to put money into stocks, gradually.
- This could be over 5-10 years. Stocks stayed sub 15 pe for 12 years from the mid 70’s to mid 80’s (1974-1987) so this may be hard to stick with but dollar cost averaging would have paid off well during this period.
- More Countries will secede as they blame weak nation state monetary policies for their economic woes.
- The scaling problem will be solved not due to rational thinking but because the economic incentives will outweigh the egos.
- I don’t think price can be predicted except to say it will be more than 10x today’s price if this transpires. Rick Falkvinge and Wences Cesares do though.
This is a positive outcome scenario for bitcoin, driven by macro events. Best to think of it as Science Fiction. While writing this I keep in my mind that there is a nontrivial chance that Bitcoin could go to 0. I also run a bricks and mortar retail business so these events would be potentially very bad for me. In the next 10-15 years the following things could happen: