Bitcoin to 100K
There are a lot of theories in the crypto space that argue that Bitcoin will reach $100,000 before the next halving. Some even argue that we could reach that price point before the end of 2021.
Here we have compiled a few perspectives that support a higher price point for Bitcoin.
IF we missed any, please let us know and we will be glad to add it for others to read.
Bitcoin’s ability to reward savers
If you saved $100,000 throughout 2017, today its value would have been $94,000, a total loss of 6% due to inflation. That is without considering the fees and hidden charges that institutes charge.
Even if you invested in the S&P 500 for 12 months at $8333 each month throughout 2017, your portfolio value today would have been $110,000.
If you saved $100,000 in Bitcoin throughout the 2017 (prices ranged from $920 through $14,000 during Jan 2017 through December 2017). For the purposes of this comparison we are using the last week prices from each month as available on Coinmarketcap historical snapshots.
$100,000 invested in equal amounts throughout 2017 would look something like this.
Since 2017, Bitcoin price has crashed and rebounded. At the lowest point of the crash of $3000 per bitcoin, your portfolio value would have been $144,000.
In today’s average price of $16000 per bitcoin, your $100,000 savings would have been worth $770,000.
Due to its increasing demand and reducing supply, Bitcoin is expected to reach $100,000 in the next 4 years. Some models show that bitcoin will be worth $1 Million by 2030.
Only time will tell us whether bitcoin reaches these prices or not, but point being, no other asset of any class has crazy growth predictions like Bitcoin has.
According to Plan B, Gold had the highest stock-to-flow (SF) ratio of 62. That is, it will take 62 years to produce the gold that is currently in the market. In other words, you cannot willy-nilly inflate the supply in a year or two due to how scarce gold is and how difficult it is to find and mine it.
Current SF for Bitcoin is 25, however, by the end of 2020 or 2021, this could jump to 50. By the next halving in 2024, Bitcoin could surpass the SF of gold.
According to Plan B, “The predicted market value for bitcoin after May 2020 halving is $1trn, which translates in a bitcoin price of $55,000. That is quite spectacular. I guess time will tell and we will probably know one or two years after the halving, in 2020 or 2021. A great out of sample test of this hypothesis and model.”
However, following the trajectory of Plan B’s SF analysis, Bitcoin could easily reach $1 Million dollars by 2030, according to some commenters.
Stimulus and unlimited printing of fiat
COVID has exposed another flaw in the fiat system. It is that governments can print as much money as they wish whenever they wish to do so.
Whenever governments resort to simply print money without having a basis in asset value or growth in GDP, it erodes the value of the fiat in circulation.
This is what happened to Argentina, Venezuela, Zimbabwe and more.
The US dollar has lost over 99.97% value since 1900. For instance, whatever you could buy with $1 in 1900 will need $31 today.
COVID has added salt to the wound for fiat. It exposed the blatant fact that governments can and will print money to their whim without regard to the inflation and impact on savers.
This increased supply in fiat helps stock market and market liquidity which in itself helps people who are invested in the stock market and other vehicles which is generally the wealthier part of the society.
Other factors strengthening the crazy Bitcoin price predictions
- Institutional FOMO, for instance, Square, PayPal, Grayscale, etc., entering the market
- Easier onboarding of new retail investors
- Greater technologies and DApps being built on Bitcoin
- Great DeFi services to lend and borrow money
- Globally accepted single denomination that does not need to be converted in the future (with enough places accepting bitcoin)
What other factors do you think will contribute to Bitcoin’s shooting past the $100,000 barrier?
Let the FOMO begin…
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