1/19/2021 Bitcoin and the Adoption S-Curve — Osprey Funds

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Bitcoin & the

Adoption S-Curve
By Greg King, January 14th, 2021

When people ask us if Bitcoin is digital gold, here’s what we

tell them.

First, there are all the reasons you might have heard before
that say it is:

1. Bitcoin was designed to behave like a digital currency but

has evolved to behave like a store of value.
2. Like gold, bitcoin is rare, uniform, universally accepted,
easily divisible and impervious to decay, rot, or spoiling.
3. Both are scarce - there is a finite supply of 21 million
Bitcoin.
4. Better than gold, Bitcoin is digital, making it easier to
transfer.

Yes to all of these and we could go on. But Bitcoin has

appreciated much more than gold and we think it will continue to
do so and so there must be a difference that explains why. 

Here is a Bitcoin/gold ratio chart that visualizes the

considerable outperformance:

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1/19/2021 Bitcoin and the Adoption S-Curve — Osprey Funds

Here’s a key difference between Bitcoin and gold, that helps

explain this outperformance and suggests the trajectory going
forward.

The two assets are very different in terms of stage of adoption.

You Are Here on the Bitcoin

Adoption S-Curve
Breakthrough technologies often follow an Adoption S-Curve.

This Adoption S-Curve reflects the cumulative rate at which a

population adopts a new technology or product. Here’s what this
looks like relative to Bitcoin:

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1/19/2021 Bitcoin and the Adoption S-Curve — Osprey Funds

The S-Curve breaks global adoption into stages along the growth
cycle: Innovators, Early Adopters, Early Majority, Late
Majority, and Laggards. 

Most of the growth occurs during the Early and Late Majority
stages.

Bitcoin is 12 years young and it is much earlier along this

curve than gold which has been a Laggard for millenia. 

We believe bitcoin is now in the Early Majority Phase as

measured by the number of global investors and the total amount
invested so far.

Marginal dollars will be added to bitcoin as adoption continues

along this curve and this will be massive. 

This Adoption S-Curve phase is the demand force behind Bitcoin’s

stellar returns. 

More Than Digital Gold

Today, if you believe Bitcoin will serve as “digital gold,” you
are in the minority. This is good news for investors. 

Why? Well, once everybody has adopted Bitcoin as a store of

value, the potential outsized gains from investing will
diminish. 

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What will we be left with then? Gold-like returns. 

And how will we know we are there? Gold-like volatility.

As we move through the Early Majority Phase into the Late

Majority Phase, Bitcoin demand growth will continue to
accelerate.

Greg King is the Founder and CEO of Osprey Funds.

This information should not be relied upon as investment advice,

or a recommendation regarding any products, strategies, or any
investment in particular. This information is strictly for
illustrative, educational, or informational purposes and is
subject to change. The author of this article owns bitcoin,
directly and through the Osprey Bitcoin Trust.

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