I bought a lot of BTC back in May around the halving. The last two halvings were followed by bull markets that lasted 12-18 months, so I'm fairly optimistic.
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The way I think about it, price is an equilibrium between supply and demand. For bitcoin, supply is the number of new bitcoin sold each day, and demand is the number of new dollars sold each day. Dividing new dollars by new bitcoin gives units of (dollars/BTC), eg a price. There's three components to understanding bitcoin supply and demand: difficulty adjustments, halvings, and network effects.
Difficulty adjustments keep the supply constant. Currently 6.25 bitcoin are issued every 10 minutes, and miners will sell some of that in order to pay for electricity. Every two weeks, the difficulty is readjusted to keep blocks at 10 minutes. So the supply curve is extremely inelastic, even flat or negative. If the price skyrockets, the same amount of bitcoin get mined (unlike most commodities, eg oil), and less might get sold since miners don't have to use as many BTC to pay for electricity.
Halvings introduce supply shocks. Every four years the number of new BTC issued per block drops in half, with the most recent being in May. Naively, this should double the BTC price, assuming the price is determined by inflows and outflows. However it takes a while to adjust the price because most of the selling volume probably isn't miners but day traders or long-term holders selling their position. I'm curious to see data on this.
Network effects are the real kicker though. One of bitcoin's main use cases is digital gold - it preserves wealth but doesn't pay interest (which is good right now given low interest rates and potentially high inflation). Most investors don't like bitcoin as a store of value because of high volatility. However, as price goes up, volatility goes down, so demand should go up. The fact that bitcoin's demand should increase with price is rather crazy.
The market cap is only $200B which is small compared to many stocks and very small compared to gold. Because it's small in relative terms there's a lot of upside so it's a pretty asymmetrical bet. An econometrics guy under the pseudonym Plan B is predicting $288K for this cycle using a
stock-to-flow model but that feels high IMO. The (cycle peak/price at halving) were about 100x and 30x for the last two halvings respectively, so it may be getting weaker each time. 10x seems pretty reasonable though. In the end it's unpredictable but the outlook seems pretty good right now.
I agree with you in the sense that my personal values favor the opposite, that I spend as much time in nature instead.
