Bitcoin has been predicted to reach an outstanding $250,000 per coin in the next 5 years. Some other eggheads/experts e.g John McCafe have predicted a $500,000 bitcoin in 3 years. I for one will like to stick to a conservative estimate of a $250,000 bitcoin. Also, do note that if bitcoin achieves this feat, there are a dozen other altcoins (all other cryptocurrencies/crypto asset apart from bitcoin are called altcoins) that will achieve an astronomical return on investment that might trounce that of bitcoin.
Follow me as we analyze the reasons why I and so many other cryptocurrency enthusiasts around the world believe this feat will be achieved.
- Millennials: The Jury is out on how this generation is defined. Some say they are people born between 1990-2000 others believe they are people born between 1982-2000. Whatever your definition, it is certain that this generation is a very unique one. It’s the generation who grew up with access to personal computers at home and who grew up on the internet. To this group of people, everything they did was on the internet. They got their entertainment, did homework and other intellectually stimulating activities on the internet. They bought and sold on the internet. To this group of young people, the idea of exchange and store of value in the digital form is not strange at all. This generation understands the concept of the blockchain and the concept of the internet of value. The future of value and money is decentralized digital money and there is a generation who understands this fact ready to power it. Bitcoin and other altcoins with intrinsic value will continue to increase in value going forward and a valuation of $250,000/bitcoin in 5 years is not far-fetched because of this reason.
- Total Asset Value Worldwide: As at this moment, there are about $652 trillion dollars in assets (excluding derivatives) the amount accounts for the value of stocks around the world, gold, silver, narrow money, broad money, debts (government and cooperate debts). The derivative market alone (not included in above estimates) is worth $1200 trillion. if we exclude the value of derivatives and stick with the value of the remaining assets which is $652 trillion. It has been estimated that if just 10% of the value of gold which has a $9 trillion valuation, moves into bitcoin then the value of bitcoin will hit $45,000 per bitcoin. just $5 trillion moving into bitcoin from an overall asset valuation of $320 trillion (excluding derivations) around the world will produce a $250,000 bitcoin. $5 trillion is less than 1% of the overall asset value of $652 trillion. With the security of bitcoin’s cryptography, its scarcity (only 21 million bitcoins will ever be produced), its decentralized nature (It cannot be controlled by a single entity either persons, groups of persons or governments). It is certain that a move of less than 1% of the world’s global asset valuation into bitcoin is possible.
- The Coming Economic Collapse: Hold your breath, yes you read that right, the global economic collapse – you may have heard that before or probably you are hearing it for the first time. It is true, the global economy is at a verged of a collapse and reset (subscribe to our email updates to receive our free ebook on the global economic collapse). I will give you a brief overview here and show you how this will trickle into bitcoin hitting astronomical valuations.
There are basic reasons why the global economy will crash.
- Global government debts: Over the past 30years central banks across the world have embarked on quantitative easing in order to bail out the global economy. This has resulted in the economics of these countries accumulating outstanding debts. For example, the United States alone owes a combined $ 21 trillion in debt. At a point between 2009-2013, the United States was printing about $2 billion every day over that period of 4 years. The European Central Bank (ECB) is currently embarking on a series of Quantitative easing. They are printing about $1.8 billion Euros daily up till this moment and they have been doing that since March of 2015. These debt and all the once that have been accumulated by all the the major Central Bank across the world are beginning to burden the world economy and the world economy is already showing cracks that may cave in at any moment.
- Normalization of economic policy: In a normal economy, there are interest rates. if you leave money in a bank, you get an interest for having your money in it. Now back up a bit to 2008-2009. There was a worldwide economic collapse. In order to stimulate world economy, major Central Bank e.g the Federal Reserve Bank (USA), the European Central Bank (Euro), the Bank of Japan, the Swiss National Bank etc slash interest rate to zero. In fact, the Swiss National Bank cut interest rates to -1.2% meaning you would be penalized for leaving your money in a bank (that is ridiculous!). As strange a that sounds that was how far the top central bank went to prevent the 2008 financial crisis from degenerating into a full-fledged financial collapse (of course beyond this they also went into money printing mode called quantitative easing). Right now, some of these central banks are trying to normalize their economic policies i.e they are trying to raise interest rates. The big problem here though is that like a junkie, the world economy is already hooked on this low-interest rate/quantitative easing environment. Getting the world economy off this dangerous economic policy might be the trigger for the impending collapse. When this economic collapse occur which will be due to central banks inflating global debts to unsustainable proportions the general population which already have been disappointed severally in the past by the policies of central banks across the world will look for alternatives assets that can retain value over time and this is where bitcoin will come into play. A lot of money will pour into bitcoin from around the world and cause a skyrocket of valuation for bitcoin.
As I conclude, I would like you to understand this fact. If you invest in cryptocurrencies (the valid ones with real-world use cases) you will become extremely wealthy in 2-3 years. Take a journey to the past ………………………………… in 2009, after, the global financial crises the price of gold and other precious metal skyrocketed. Gold moved from $805 an ounce as of November 2008 to reach $1899 in August 2011. This happened because gold is the traditional asset for the store of value and in that global crisis situation, it began to get an inflow of cash and the value skyrocketed. Now fast forward to the present time the rise of bitcoin, in particular, moving from 2bitcoin/cent to $7000/btc over the last eight (8) years (it actually hit $19,450 in Dec 2017) . It is obvious that cryptocurrencies, in general, has matured as an asset class and we expect a massive influx of funds from both institutional and private investors into bitcoin and other cryptocurrencies with real-world use cases as more people around the world begin to lose faith in our current financial system.
- NETWORK EFFECT: The fourth and final reason I believe bitcoin will achieve a valuation of $250,000/bitcoin is because of the network effect. As I write this article in Sept 2018 there are only about 35 million bitcoin wallets. That number includes multiple wallets owned by the same individual and wallets opened by individuals without any bitcoin stored. Assuming all 32 million bitcoins are active & each is owned by 1 individual, that figure still implies that only about 0.5% of the world’s population is involved in bitcoin. As cryptocurrencies achieve more mainstream adoption and more people begin to use and adopt bitcoin we will see bitcoin price increase and possibly achieve the $250,000 valuation.
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