HOW BITCOIN CAN REACH $1,000,000
"Bitcoin to a million", We've all heard it and now former Goldman Sachs Hedge Fund Chief Raoul Pal is the latest person to claim that Bitcoin will reach $1m and by 2025! Raoul claims that he has had numerous conversations with top Hedge fund Managers who are ready and waiting to invest billions into Bitcoin. They claim that "once the pipes are properly laid" for institutions to meaningfully enter the crypto space, there will be a flood of investment into Bitcoin! If this were to happen then there's no doubt that Bitcoin will hit a new all time high however, is $1m within the realm of possibility?
5 REASONS WHY BITCOIN COULD REACH $1M
1) GLOBAL FINANCIAL CRISIS
With the global economy in turmoil, governments are printing money, devaluing currency, increasing inflation and taking on more debt. If any countries suffer a financial collapse then investors will likely seek diversification from other traditional fiat currencies. Hyperthetically, if the value of the dollar were to crash (It's possible, Just ask Turkey, Argentina, Greece etc.) then Bitcoin wouldn't necessarily have to jump 75x from here to reach $1m per coin. Depending on the severity of the US dollar collapse then Bitcoin may only need to retain it's market cap of $250b (currently) to be worth $1m per coin!
2) THE BITCOIN COMMUNITY
Not even Tesla boasts a community as diehard as those that believe in Bitcoin! This is evident from Bitcoin's revival after numerous price crashes of up to 97%. Every time there has a been a severe sell-off, buyers have entered and kept Bitcoin alive and trending higher. As long as people believe in the vision of true decentralisation then it's unlikely that Bitcoin will fail.
3) BLOCKCHAIN INDUSTRY GROWTH
The Blockchain industry is set to grow by a Compound Annual Growth Rate (CAGR) of 67% over the next 5 years. Not only that but the World Economic Forum (WEF) predicts that 10% of global GDP in the form of trade agreements, energy sharing, mortgages and business transactions could be performed on blockchain technology within the next 10 years. The greater significance that Blockchain & Cryptocurrency achieve going forward will increase the size of the market opportunity for all cryptocurrency and blockchain projects including Bitcoin!
4) DIGITAL PAYMENTS
Digital payments were already replacing cash before the pandemic and the coronavirus has only accelerated that trend! The global digital payments market is expected to reach $13 billion by 2025 (24% CAGR) and Bitcoin will likely capture a portion of this ever growing total addressable market.
5) BETTER THEN GOLD
When investors are concerned about the state of the global economy then they often flee stocks and store their money in a "safe haven" such as Gold. The precious metal currently has a market cap of almost $3 trillion and many believe that Bitcoin may 1 day command a similar market cap. This is because like gold, there is a limited amount of Bitcoin, it is not issued by central banks and it can easily be exchanged for fiat currency. Many believe for these reasons that Bitcoin is a viable haven! In fact, an increasing amount of young people claim that they would prefer to use Bitcoin as a store of value of gold.
In many ways Bitcoin is a more advanced and better product than the existing options it is aiming to replace as a payments option or store of value. With it's first mover advantage within a blockchain industry set to grow 67% annually through 2025, Bitcoin could just easily grow in tandem. However there are many risks associated with investing in cryptocurrency. The industry has a very low barrier to entry and therefore new projects are being started all of the time with the aim of competing with Bitcoin.
Even if these projects are not superior to Bitcoin, their arrival on the scene will give traders more options to invest in and this will dilute investments within the currently concentrated crypto space. Therefore even as the blockchain & cryptocurrency industries continue to grow, so will the amount of options to invest in and this may hinder Bitcoin's rise... To $1 million!
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