Does Bitcoin to 1 Million really sound that crazy?
What will the price of Bitcoin be in 3 months or 6 or 12? This is the multi-million-dollar question on investors’ minds. Predictions for the future price of Bitcoin have kept us captivated but also uncertain. Many savvy investors predicted that Bitcoin would reach $40,000, and they were right. But what about $1 million?
As of this article, the Bitcoin price CAD is over $60,000. This is up over $10,000 CAD from only a month ago. With Bitcoin’s value soaring 350% in the past 12 months, how do investors determine the future value of Bitcoin?
Let’s unpack what determines Bitcoin’s value and growth.
Bitcoin’s coin was created to stop being mined when the total number of Bitcoins reaches 21 million. As such, because of the design of the code, about every four years, Bitcoin mining “halves.” That means that Bitcoin’s scarcity will continue to increase because miners are increasingly rewarded with fewer Bitcoin after confirming a transaction. Historically, after a Bitcoin halving, the value increases because it creates more scarcity.
Once Bitcoin has reached capacity, and is no longer mined, the only way to use Bitcoin will be as a form of currency or held as an asset, as no longer be new Bitcoins be a reward for miners.
Adoption of Bitcoin
More and more traditional companies and investment firms continue to invest in or accept Bitcoin as payment. This includes investing in Bitcoin as a part of many hedge funds and pension plans. As the adoption rate of Bitcoin increases, so does its price.
As mentioned, Bitcoin proved that a decentralized, secure internet and network of finance was possible. However, this technology was in its very nascent stages when Bitcoin was finally built using blockchain. Since then, many other projects have begun to build on blockchain. This increases the value of not just Bitcoin but on researching the application of blockchain for other uses.
We have seen the application of blockchain in E-Estonia, which has digitized its entire economy and bureaucracy. And, of course, Ethereum, which was only possible because Bitcoin paved the way.
Cryptocurrency Market Cap
Presently, the total cryptocurrency market cap is around $162 billion. However, this is still far less than traditional assets, such as gold, bonds, and the stock market. Combined with the other factors already mentioned, this room suggests that Bitcoin is nowhere close to its maximal potential value.
Tesla and Elon Musk
One reason that the Bitcoin market has moved so dramatically recently is the acquisition of $1.5 billion work of Bitcoin by Elon Musk, the chief executive of Tesla. His purchase has single-handedly caused the price of Bitcoin to move around $10,000.
Expert Max Keiser
The host of the Keiser Report, Max Keiser, believes that Bitcoin will reach $100,000 in the short term and $400,000 in the long-term. His long-term prediction and goal for Bitcoin’s value is based on the current pandemic as well as the fact that Bitcoin is more valuable than gold presently.
FOMO: Fear of Missing Out
Another significant driver of Bitcoin’s bullish valuation is investor FOMO. For many, it seems that there is a now or never investment move to be made. 2020 has seen significant shifts in the marketplace as a result of COVID-19. Oil and gas stocks are way down; many think beyond repair, Zoom’s stock has exploded, and cryptocurrencies, such as Bitcoins, continue to prove their worth. As such, many investors are investing like this will be their last chance to do so.
The question remains; will we see Bitcoin reach $1 million? How do you accurately predict the value of an asset like Bitcoin? Many believe that $1 million is purely speculative. However, there are many supporters and investors who want to see this happen. And so, it is possible that by 2025 Bitcoin will be worth $1 million.