You may have heard the saying before I am sure that when a market is strong that logically it must come down once that market gets overvalued, however is this true?
The truth is this saying is not true in many ways, Assets over time have a tendency to rise, why, because what they are valued in is debasing. Yes referring to the U.S. dollar or AUD or NZD, you name it, they all tend to lose around 2% to 3% on average per year in purchasing power. This does not mean that markets cannot get overvalued, however if you are expecting $Gold or $SILVER to lose a lot of value in the future you may be disappointed.
You see, when currencies lose value and in particular today ( higher inflation than usual ) assets will not only rise due to demand for that asset, but also because what it is valued against is losing 2 to 3% of its value.
Remember the value of $GOLD in the early 1990’s or 2000’s, it was much cheaper than today and so on. Same can be applied to $BTC as well, low limited supply, demand combined with a debasing currency it is valued against essentially equals a likely higher price over time, as long as demand and supply stay the same that is.
This especially effects commodity type markets with limited supply. While they can go down inflationary pressures are also always there helping them increase in value slowly over time.
Now it is important to discuss quality of store of value, the more demand an asset has combined with restricted supply or fixed supply the better it is at storing value over time.
This is why many believe $BTC to be in the millions one day and for $GOLD to be in the tens of thousands. It is just math and time.
