Crypto’s leading opinion leaders believe Bitcoin will reach $1 million by 2028.
Their estimates are not so quirky that they might seem at first glance.
Investors are easy to be exposed to fundamental trends here.
At the Token2049 Crypto Currency Conference held in Dubai on April 30th, Arthur Hayes, co-founder of Crypto Exchange Bitmex, made bold predictions about the future of Bitcoin. (Cryptography: BTC).
“Don’t worry,” Hayes said, “Bitcoin will be $1 million by 2028.” He is not the only big guy who makes similar predictions and makes similar predictions in a few years.
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Is Hayes correct? Let’s break down the numbers here and evaluate how realistic it is for Bitcoin to reach $1 million over the next three years or so.
Currently, Bitcoin costs around $96,000. So, to reach the price of $1 million per coin, you need to grow 10.4 times. With most assets, this is not possible.
Over the past five years, coin prices have risen 949%. Therefore, there is a recent precedent that shows the scale of growth in the ballparks that are appropriate to meet the price target in question, despite being a slightly longer period than the approximately three-year timeline we are considering here.
Let’s look at this issue from a slightly different angle and better understand whether reaching the target is plausible. Today, Bitcoin’s market capitalization is $1.9 trillion. Given the 25.5 million coins likely to have been mined by 2028 (up from today’s 19.8 million), Bitcoin’s market capitalization should be around $20.5 trillion.
For reference, as of the end of 2023, approximately $213 trillion was held on investment assets in the global market. Over the next few years, if you assume that institutional investors will buy it for exposure and that 2% of that amount will be allocated to Bitcoin, that would be about $42 trillion inflows. Isolated, it obviously isn’t enough to drive the coin’s market capitalization well enough.
However, several factors limit the floating supply of Bitcoin that can be purchased. In particular, the country is considering whether to implement a Bitcoin repository. Similarly, several major companies are beginning to accumulate assets. They will not sell it unless they desperately need cash as long as they think they are worth more in the future than they are now.
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