Could anyone provide a more methodical way of thinking about this?
See: https://fred.stlouisfed.org/series/M1 .
Relative to the early days of Bitcoin, the room to fluctuate upward is much smaller than the room to fluctuate downward. Bitcoin's market cap is ~$200B, while M1 is ~$6000B. Back in the day, Bitcoin's market cap was a few million dollars or less. That said, BTC now has a powerful brand in the eyes of many possible buyers/holders, which makes a retreat all the way to zero far less likely.
I suspect that the only things that could kill BTC completely these days are a compromise of the hash algorithm, a coordinated effort against it by a consortium of governments that must include the US, or a devastating 51% attack by a consortium of miners. The third is perhaps least-likely, as the miners would stand to lose a lot if BTC imploded.
Curious if you could recommend any good read on BTC upside potential given this framework -- for example, right now the M1:BTC ratio is 1:30, but what factors/behaviours would dictate that ratio to change? or is the idea that the ratio keeps constant with more inflation and thus pushes BTC higher?