An analyst who rightly predicted that Bitcoin would reach $2,000 in 2017 has gone on to predict greater things for the digital currency in the future, claiming that it can reach $100,000 in 10 years.
In December 2016, Denmark-based Saxo Bank released a report called Outrageous Predictions for 2017. At the time, the price of Bitcoin was trading around the $750 mark and seemed a long way from attaining anything what we’ve seen so far in the first half of 2017.
In the report, the bank made a number of forecasts on an array of things such as Brexit, stocks, banks and commodities around the world. It also mentioned Bitcoin. More specifically, Kay Van Petersen, a global macro strategist at Saxo Bank, predicted that under Trump’s presidency and his spending ‘binge,’ which would push the dollar sky high, emerging markets would be forced to seek alternatives.
This, in turn, produces an ideal environment for Bitcoin to test the $2,000 mark, he adds, which it did when it reached that price on the 21 May, 2017. It subsequently continued achieving new heights where it nearly attained $2,800 before falling back down to $2,300 on 30 May after a price correction saw its bubble burst.
Now, though, Van Petersen is back with new predictions and is looking ahead toward the long-term growth of the digital currency.
Bitcoin at $100,000?
Quoted in a report from CNBC, Van Petersen is reported as saying that in 10 years, ‘bitcoin’s market capitalization would be ten times the average daily volume, giving a figure of $1.75 trillion for the market cap.”
In 10 years time, there will be 17 million Bitcoin in circulation, which, when divided by $1.75 trillion, would equate to each Bitcoin being worth over $100,000.
Not a bad estimation considering how far the digital currency has come in its relatively short life span and the fact that it has achieved so much in the first part of 2017. With the price of Bitcoin steadily rising, it seems probable that Bitcoin could quite easily reach $100,000 in 10 years.
However, while Van Petersen states that his prediction is ‘conservative,’ he believes in the future of digital currencies.
“This is not a fad, cryptocurrencies are here to stay. There will emerge two to three main ones. Bitcoin will be one of those. And the reason is the first-mover advantage, the scale and the pioneering.”
It is hoped that improvements to Bitcoin scalability issues will put an end to the gridlock that many users are experiencing with their unconfirmed transactions. This is one problem with the currency that the community is struggling to resolve in a timely fashion.
On the 24 May, the Digital Currency Group (DCG), which represents 56 companies in 21 countries and makes up 83.28 percent of hashing power, $5.1 billion monthly on chain transaction and 20.5 million Bitcoin wallets, revealed that a scaling agreement had been reached for the activation of Bitcoin Core’s Segregated Witness (SegWit) and a 2MB hard fork implemented within six months.
The agreement also lowered the threshold for activation from the original 95 percent to 80 percent of the network’s mining power. The arrival of this news also pushed the price of the digital currency up to over $2,300 for the first time.
In an interview with CoinGeek, Massachusetts-based software developer Gavin Andresen, was hopeful that a solution will be reached to ensure Bitcoin’s future:
“I’m hopeful the agreement announced today (SegWit plus a 2MB blockchain increase) finally breaks the gridlock. I think everybody using the Bitcoin blockchain and all the companies that have to deal with customers that are using the Bitcoin blockchain see that network is near a breaking point.”
Room to Grow
When Bitcoin first came on the scene in 2009 there were only a few select people who truly understood what is was and what Satoshi Nakamoto was attempting to achieve with it.
Now, the digital currency is known all around the world, is accepted in many shops in various countries and is undertaken as a form of payment for countless day-to-day services. Not only that, but several people have undertaken round-the-world trips only using Bitcoin as a form of payment.
In such a short time, Bitcoin has managed to demonstrate it has real world value, but it also has plenty of room to grow and expand on what it’s doing at the moment. Van Petersen believes that, with time, these developments will appear.
“Volumes are going up, volatility is going down. A lot of people talk about the volatility, but if you are in Zimbabwe or Venezuela, this volatility is nothing. This is the interesting thing to me. I think in the West, a lot of people view it is as speculative, but emerging markets will get it, their needs will be different.”
Growing Risks for Investors?
Interestingly, while Van Petersen is predicting great things for the future price of Bitcoin, a report from the Nikkei, states that with soaring Bitcoin prices, investors face growing risks.
Unlike investments in assets such as stocks where price-earning ratios and other measures aid investors’ decisions, when it comes to digital currencies there is ‘almost no yardsticks for investment,’ the report states.
It’s not surprising that there have been comparisons to the Dutch tulip bubble in the 17th century, and yet, the buzz around the price of Bitcoin and where it’s heading hasn’t done anything to stem its flow.
It’s because of this that the digital currency community remains excited about the path that the currency is on and what it achieve in 10 years time. Within that time could we be using the currency more easily and freely in shops and how we undertake our day-to-day transactions? Will banks be less relied upon? And just as importantly, will we have reached a solution to the cryptocurrency’s scaling issues by then?
Who knows, but if Bitcoin is to reach $100,000 in the next decade, it would certainly be an exciting time for the digital currency community. So much so, that it may even be worthwhile holding some Bitcoin in a secure wallet to reap the rewards further down the line.
As of the 1 June, 2017, the price of Bitcoin is trading at $2,440.
Featured image from Flickr via tiendientu vietnam.