There are a number of forecasts that see the Bitcoin at 1 million and more. Most recently, Jesse Lund, Global Head of Blockchain Solutions and Digital Currencies at IBM , gave the 1 million forecast in an interview in February 2019.
I tried to analyze this value from a purely macro-economic perspective. And by now I come to the same result of USD 1 million. Rather the value of the Bitcoin will be even higher, because many Bitcoins are already lost. In the end, there might be 16 or 17 million bitcoins that can be used.
In the following line, I will briefly present my insights to you and invite you to discuss ...
1. When does a currency become a currency?
We see three main currencies currently. Dollar, Euro and RMB (China). Dollar wants to remain the leading currency. Euro wants to become an alternative. And the Chinese want to create a new Asian reserve currency with RMB. Of course there are other important currencies. But I will leave them for now.
The first question is. Which smallest unit does a currency need? In the case of the dollar and the euro , it is Cent. At RMB it is a Fen. So 1/100. Especially for currencies with similar values, the "psychological exchange" is quite easier. Since we can imagine the value better. Question therefore. How high would the value of a Bitcoin or a Satoshi have to be, so that we can deal with it well? Relatively easy to answer: 1 Satoshi = 1 Cent (Penny). By th way. It is important that we focus on the usability of Bitcoin and not on the Bitcoin price. Only from a high market capitalization on is there a real usability. And this market capitalisation should be at least at 1 million, otherwise Bitcoin would maybe remain a speculative object and would not become a real currency.
1 BTC = 1,000,000 USD = 21,000,000,000,000 USD Market capitalization (21 trillion)
1 BTC = 100,000 USD = 2,100,000,000,000 USD Market capitalization (2,1 trillion)
The monetary supply 2017/18 from
China ~25 trillion USD
USA ~14 trillion USD
EUR ~14 trillion USD
The total amount of gold in the world has a current value of 6 trillion USD
Why is a high market capitalisation easily possible? From today's point of view this is just 21 times the market capitalization of Apple or Amazon. Lucid Investment Strategies believes that Bitcoin could go as high as $10 million per Bitcoin if Bitcoin were to emerge as a solution to the global debt crisis. For comparison, the market capitalization of the 100 largest companies worldwide is currently around 15 trillion, perhaps even more. The current global debt level is around 250 trillion. US national debt around 22.03 trillion US dollars. By the end of 2020 at the latest, many countries will have to put the financing of large parts of their national debt on a new basis. The International Monetary Fund (IMF) has identified debt as one of the major risks for the global economy.
Conclusion: Macro-economically, Bitcoin can become a real alternative currency. Requirement the price rises.
2. What "technical" law speaks for it?
There are some who doubt the following approach, but I think it makes sense to discuss Moore's Law. Moore's Law says that the technical performance of computers is growing exponentially. More specifically, the number of transistors in new processors doubles every 12 to 18 months. Moore's Law can be applied to all digital technologies. The Bitcoin price can also be modelled with Moore's Law or exponential growth.
However, the Bitcoin price is growing even faster than the performance of computers. For Bitcoin , the price has even doubled every five to eight months to its peak at 20,000 USD. The starting point for the forecast was chosen when the Bitcoin cost more than 10 dollars for the first time. Based on the forecast, a Bitcoin will reach one million dollars by 2028 at the latest.
I think that 1 million is also the limit around that the price will oscillate at the end.
3. What are the costs for producing a Bitcoin?
Current estimates assume that the production of a Bitcoin will cost around 300,000 dollars in 2022. Another aspect that speaks for a rising price. The probability that Bitcoin will go against zero is very risky. Because only that would be the actual alternative.
Look at my red lines in the Chart. How high is the probability that Bitcoin will follow a course along the red dotted lines? The entire crypto market must collapse. For this case the market is already too large. I am writing this because many people compare the crypto market with the tulip market hundreds of years ago. The cryptomarket is no longer a closed system. It is a global phenomenon with market power.
4. Will the whole banking system change?
The landscape of banking, lending and payments will change radically. The most experts now agree on this. Paper money will be an obsolete model for the coming decades. What remains are real values such as real estate, gold and silver and other and, on the other hand, digital currencies, which are instruments of value "transport".
More than 7.6 billion people live on Earth in 2019. The world's population is growing by over 200,000 people a day. Every year, the population of the earth increases by more than 80 million. According to the German Foundation for World Population, this corresponds roughly to the population of Germany. This fact alone, that billions of people will soon be able to trade with Bitcoin worldwide, changes the perspective on banking and the Bitcoin-1-million-dollars-Forecast-Idea again.
Also have a look at these charts:
Dec 10, 2018
Oct 12, 2018
Let's see what happens. Happy trading. :-)