A Small Amount of Bitcoin Could Be Adequate for Retirement: Explanation Provided
News Article: Bitcoin Retirement Savings: A Global Perspective
Bitcoin, the digital currency, has been a subject of interest for many investors worldwide. Recently, Bitcoin researcher and investor 'Smitty' has developed a model to calculate how much Bitcoin is needed for retirement in various countries.
According to the research, holding one Bitcoin (1 BTC) is rarer than being a millionaire, with around 800,000 to 850,000 unique holders globally. This figure is significantly lower than the estimated 16 million millionaires worldwide.
The model, based on each country's average income level, adjusted for inflation, age at retirement, and Bitcoin's power law model for predicting prices, suggests that for more than half of the countries listed, less than 1 BTC would be enough to retire on for most people in 2035.
By 2035, most countries will require between 1 and 10 BTC to retire comfortably, with high-cost countries such as the U.S. and parts of Europe at the higher end of this range. However, over half of the countries worldwide could manage retirement with less than 1 BTC, and lower-cost countries might need less than 0.5 BTC by that time.
Looking ahead to 2045, the projections are even more striking. The Bitcoin value is expected to reach approximately $1.7 million per BTC, leading to a sharp drop in the required BTC holdings for retirement. Many countries would only need about 0.1 BTC or less for sufficient retirement funds, except for a few super-wealthy or high cost-of-living nations that might still require up to around 1–1.5 BTC (e.g., Switzerland).
The term "One Coiners" refers to individuals holding 1 Bitcoin. The number of One Coiners is an estimate, and it's important to note that the model's predictions assume that Bitcoin prices will continue to increase in accordance with the power law model.
The power law for Bitcoin is derived by taking a linear regression of the historical Bitcoin price, which helps to include inflation and maintain purchasing power assumptions. The number of addresses with a balance over 1 BTC, including exchanges and institutional whales, has remained above 1 million for the last year.
In summary, the research findings illustrate that the amount of Bitcoin needed for retirement varies significantly by country and year due to factors like average income, inflation-adjusted costs, and local living expenses. These estimates reflect generalized retirement funding needs assuming Bitcoin becomes a predominant store of value, adjusted for local economies and retirement ages. They do not constitute financial advice but provide insight into potential exposure required based on Bitcoin’s projected price trajectory and average income levels by country.
- In many countries, less than 1 Bitcoin (1 BTC) might be enough to retire on by 2035 due to the power law model for predicting prices and factors like average income level, adjusted for inflation, age at retirement, and local living expenses.
- By 2045, the value of a single Bitcoin (1 BTC) is projected to reach approximately $1.7 million, meaning that many countries would only require about 0.1 BTC or less for sufficient retirement funds.
- While the United States and parts of Europe might require between 1 and 10 BTC to retire comfortably by 2035, over half of the countries worldwide could manage retirement with less than 1 BTC, and lower-cost countries might need less than 0.5 BTC by that time.
- The research suggests that Bitcoin, as a digital currency and potentially predominant store of value, could greatly impact retirement savings on a global scale, depending on local economies and retirement ages.
