Bitcoin has entered Phase 5 adoption — Will this push Bitcoin’s price above $100,000

Bitcoin’s phase 5 adoption. I first came across this term #Phase5 from the podcast, What Bitcoin did, where Plan B, Jeff Booth and Preston Pysh had an in depth discussion on Bitcoin. At one point in the discussion, the topic of MicroStrategy and their CEO, Michael Saylor, making an initial $250 million investment into Bitcoin came up. This initial investment was quickly followed by two additional purchases of $175 million and $50 million. MicroStrategy buying Bitcoin with their balance sheet has huge implications of what’s to come. In this post, I will explain what Phase 5 is and the significance it holds to push Bitcoin to and above $100,000 down below.

1. What does Bitcoin’s Phase 5 adoption mean ?

I would like to share what Preston Pysh said during the podcast about where he thinks the next adopters will be.

” I think the next step is really kind of companies, the big buying pieces are going to be companies….

Private companies are first, then you’re gonna see the public companies then you’re gonna see the state actors.

I think that’s kind of the order and I would argue right now you’re having private companies taking these kind of activities.”

Peter McCormack responds to Preston:

” We’re talking about Phase 5 and 6″.

Essentially, Phase 5 is a term referring to the next phase in bitcoin’s adoption, where public companies will convert their fiat currency for Bitcoin. Why ? Simple, because in a low interest or a negative interest rate environment the fiat cash of these public companies is losing purchasing power every year. Plan B, the brain that brought you Bitcoin’s stock to flow model admitted he didn’t realize that the next phase of Bitcoin’s adoption was for public companies to start buying bitcoin until MicroStrategy did it.

Plan B explains:

” Quite frankly, I missed it completely the whole MicroStrategy thing. I was thinking banks, pension funds, maybe countries…

but never ever did it occurred to me that listed companies would do that as well. Of course they have the same problem.

With all that cash on their balance sheet. Especially in Europe where there is negative interest, it’s just going away”.

To further cement the idea that fiat is losing purchasing power at an alarming rate. A recent interview with YouTuber HyperChange, MicroStrategy’s CEO, Michael Saylor explains why other companies should follow suit.

“Companies are eventually going to need Bitcoin. You’ve got $20 billion worth of monetary energy today.

It’s losing 15% of its purchasing power a year. You’re going to lose half of that energy in 36 months unless you protect it.

If you put it into Bitcoin, instead of losing half your purchasing power, you can reasonably expect to double your purchasing power every year for the next three years,

so why not put $1 billion in and it’ll be worth $8 billion in three years.

If you keep all the money, you’re guaranteed to lose $10 billion in purchasing power.”

2. The significance

The current economic backdrop due to the COVID pandemic has caused central banks around the world to print money. According to Michael Saylor, the rate of inflation is really ~15% unlike what the CPI has been telling us. This incentive will drive companies to look for a safe place to preserve their purchasing power.

Therefore, the significance of phase 5 is that it creates a race between companies to adopt Bitcoin.

According to Saylor:

“The sooner you join, the better off you are. And as people join, it gets more powerful and the price goes up.

If you’re Tesla, you want to be first because Apple will pay twice as much, and then Google will pay twice that much,

and Facebook will pay twice that much and eventually everybody’s got to join because if you don’t join,

you’re going to lose 15% to 20% of your purchasing power … it’s just going to accelerate the transition and the adoption rate.”

Max Keiser from the Kaiser repot had a recent interview with Stansberry Research (click the link to watch the full interview). Max went one step further. He suggested that Michael Saylor, possibly Elon Musk and Larry Ellison had figured it out. They figured out that companies can barrow money at extraordinary low interest rate and use those funds to purchase Bitcoin. Max describes this as a speculative attack on the federal reserve bank.

Max Keiser said:

“Make no mistake about this, Michael Saylor and the Bitcoiners are attacking the federal reserve bank and the global central banking system.”

PlanB chimed in on Twitter and said:

3. Conclusion

IMO, Michael Saylor is right, the sooner you join the better off you will be. There have been more companies coming out of the woodwork stating that they are converting a portion of their fiat cash into Bitcoin. This list is growing! MicroStrategy has started a domino effect and theres no telling where this pushes Bitcoin.. except up =). Short supply and increasing demand makes me think $100,000 a Bitcoin is not out of the question. As a matter of fact, I think it is a matter of time.

According to BitcoinTreasuries.org, these are the current list of known companies that have already purchased Bitcoin with their balance sheet.

I believe that the current economic backdrop calls for everyone.. not just companies to put a small portion of their wealth into Bitcoin. In an environment where your money is purchasing 15% less every year is scary. This explains a lot in the prices of assets such as real estate and stocks. I was fortunate enough to purchase a home in the Bay Area last year. I was recently notified by Redfin that my new property value estimate has gone up by ~11%. This is great for people who have properties and stocks but not for those who are tirelessly saving, so that one day, they too can purchase a home. In the end putting 100 % of your money into your saving’s account is doing you more harm than good.

I understand that Bitcoin is volatile and has been televised through the air-ways that you can lose everything if you invest into Bitcoin.

I say you size your investment. It is becoming increasingly irresponsible to have no exposure to Bitcoin, so If I had $20,000 in my savings, I would put 10% of that into Bitcoin. IF Bitcoin 10x from current levels, you would have doubled your savings, if it doesn’t then it sucks but it’s not the end of the world.

Who knows, maybe in the new financial world we won’t want to convert our Bitcoin into fiat money.