People who are watching the Bitcoin rally may be wondering why Bitcoin is so expensive. The idea of value is extremely relative. Many people may think that because Bitcoin is a new asset, and it was only trading at $1,000 in early 2017, the fact that it is now near $20,000 means that it is expensive.
This kind of thinking isn't rational. There is no natural price range for anything, especially when fiat currency is used as the benchmark asset. When we think about how much fiat currency was created in 2020 alone, it is very easy to see why every asset is rising in price, Bitcoin included.
Unlike other assets, Bitcoin has some unique abilities that make it a desirable asset in times of monetary upheaval. To begin with, it isn't political, and can't be co-opted by a government. There is no way to shut the system down, and it can be used globally to make payments.
In fact, Bitcoin may still be very cheap. Again, Bitcoin is very new by monetary standards, and few people are using it as a means of savings and payment. The current price levels for Bitcoin could look inexpensive in a few years' time, as there is no set price for cryptos.
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