That is a better performance stat that the stock exchange, commodities market and forex exchange combined. But, people often complain that bitcoin’s prices are highly inflated and its just a bubble that would come crashing down. But, bitcoin continues to make giant strides into the currency and transaction markets. The important question is, how far can bitcoin go?
Unlike many other estimates, I am not going to make a blanket statement for the future price of bitcoin. I am only going to highlight the future patterns and potential of bitcoin and it is up to the reader to draw logical conclusions from it. You have to remember that people are not able to predict which way the bitcoin’s price will move in one hour with surety and you can therefore, not trust them with predicting the maximum price bitcoin will ever achieve. In any case, the opinion on the future of the cryptocurrency is extremely polarized.
For some people, the latest price of bitcoin is the maximum it will ever achieve and they predict a generally gloomy trend for the future. They think it is so because such a rapid price increase cannot be sustainable and eventually it will have to settle down and recorrect itself in the process. They argue that the maximum potential has been harnessed and the future will see bitcoin’s worth decrease more than increase. But, this is only a small fraction of the people.
Most stakeholders of bitcoin see its price increase in the future. They argue that bitcoin has hardly penetrated the economy right now but continue to make inroads. If it all goes according to plan and e-commerce begins to accept bitcoin as Utrust and other companies are aiming to do, there would definitely be a big price surge following the universal increase in demand because of it.
Right now, bitcoin is not widely accepted as payment and its price is already in thousands of dollars. Imagine what would happen if it somehow accepted worldwide in e-commerce outlets, trading and even between governments and state institutions. For me, the second argument has a lot of weight behind it and I believe the price will increase in the near and distant future.
While most agree that the price of bitcoin will increase, how much is the actual question. As bitcoin becomes a global currency staple and the made for transactions and payment, how much increase in its market cap and price can we expect?
The answer is very difficult but let me analyze it for you. As you know that payment transaction companies alone are worth $3 trillion around the world and forever increasing. They have trillions of dollars of other people’s money in the bank accounts and they are growing at a decent rate. I am talking about VISA, Mastercard, Payoneer and Paypal. Their sole purpose is to enable transactions in a debt-based economy and they are still doing pretty well for that.
So, if bitcoin’s future is going to increase because of its increased role as a transaction company, you can predict the theoretical increase in its value. If bitcoin is around $7000 right now and its marketcap is $114 billions, what would be the future like if it is able to penetrate the transaction market and dominate it? The answer is that you equate the half of the wealth of these companies with the future worth of bitcoin.
Half of $3 trillion comes at $1.5 trillion. If we round off things, it becomes clear that bitcoin’s worth can increase ten times to come out at a $1.5 trillion valuation and it would become worth $70,000 if it penetrates even half the international transaction market. So, theoretically you can expect it to increase 10 times just by its role as a transaction intermediary.
But, of course even if that happens, it will take some years for this potential to be realized and making the masses comfortable with the concept and application of bitcoin. But, it is reality that we can expect such price increase if a development like this happens in the future.
The other role of cryptocurrency like bitcoin is in Peer-to-peer payments and use in everyday lives just like a regular currency. While it is accepted that bitcoin might never be able to dominate the currency market, it can disrupt it for good, forcing central banks to use counter measures. Now the total currency in the world is currently valued at $73 trillion and growing each year.
So, even if theoretically bitcoin is able to subdue one-third of this huge genre, it comes out to be around $24 trillion. Using the early method we used in case of comparison with transaction companies, you will see that bitcoin can jump up to a mammoth 180 times from its current valuation. That comes out to be around $1 million per bitcoin. This is a massive valuation increase from its currency value.
It is expected that this will happen:
Sat Jul 11 2020 10:50:20 EDT
Sat, 11 Jul 2020 14:50:20 GMT
2 years, 7 months, 25 days, 12 hours, 2 minutes and 51 seconds to go
Average daily price change since genesis is +0.5109%
Change today so far is +8.3811%
Our current expected price is 6701.43 USD
Actual price is 7191.53 USD, so we think bitcoin appears overvalued by 490.10 USD
DISCLAIMER: This is not investment advice, we are not finance professionals.
This is all theoretically possible if bitcoin continues eating away the share of fiat currencies and becomes a worldwide directly accepted currency in outlets, in shops and at a personal level. One might feel that it will take some time to achieve this level of growth but nothing is impossible with bitcoin.
But, before you start buying bitcoins in anticipation of it reaching the millions dollar mark, please read further. Bitcoin, despite its useful properties will be extremely difficult to operate as a universal currency because its slower timeframes and relatively sizeable transaction fee.
So, critics of bitcoin’s potential as a universal currency rightly claim that bitcoin will face several challenges in being incorporated in such a dynamic role. It is already very volatile and how does one use it as a currency when its price can increase and decrease by as much as 15% in a single day.
The fiat currencies are designed to be relatively stable and thus people can be more comfortable using them as currencies rather than bitcoin. Some analysts say that the future of the bitcoin is only as a currency intermediary and large-scale currency transfer only. For regular use worldwide, we can still expect fiat currencies to maintain some kind of hold in the future even if they become dependent on bitcoins for transactions as an intermediary.
So, a lot of uncertainty is in place regarding the future of bitcoin. Not many people now doubt its tech and capability but they do doubt its universal approval and such and this healthy criticism is shaping up the future cryptocurrency-based marketplaces.
There is also the case of other popular cryptocurrencies posing a long-term challenge to bitcoin’s dominance in the market. Ether is often not considered as a serious cryptocurrency for the future because of the absence of a hard cap but others like Litecoin, Ripple, Dash and even forks like Bitcoin Cash have the potential of taking a sizeable chunk of bitcoin’s market away.
Many of these currencies especially Dash and Litecoin are faster and are very promising for investors as well as stand-alone payment and transaction methods. They will have a role to play in the future pricing of bitcoin and you can see as the bitcoin continues to stride forward, these smaller cryptocurrencies also keep increasing. The combined market of other cryptocurrencies is more than bitcoin and it will be no surprise to see any of them coming close to bitcoin, even close than Ethereum has been in the recent years.
So, your million dollar valuation of one bitcoin must have taken a hit altogether and now modest speculations would be taking root. One that keep in factor the limitation of bitcoin as a normal currency and the future role of cryptocurrencies as well as public acceptability. So, using these three basic parameters regarding the future, you can predict about how bitcoin will behave in the coming years. Perhaps it will even settle down around a particular price point but that is not close to happening right now. Bitcoin is certainly one of the most unpredictable things in the world right now.
Its price is evaluated every couple of seconds or so and people keep tabs of it and even do panic selling as the one experienced in September. So, we can see that panic selling can bring the price of bitcoin down, even if for a small period of time, but you can also see that bitcoin eventually rises and continues to set new records for its price. In my view, we haven’t seen the highest price point of bitcoin and it will continue to increase in the near future as it eats away into the shares of other currencies due to its incredible tech and decentralized approach.
Amazing things lie in store for bitcoin investors and it is always advisable to invest in some bitcoins at least for a longer period of time. This amount however, shouldn’t be your entire savings but a chunk of it that you are comfortable with.