BitCoin
Cryptocurrency mania continues! This week BitCoin is worth $2300 across all the major exchanges, with it’s competitor currency Ethereum blasting to a new sky high with a $20 billion market cap. The latest news about the BitCoin bull run comes from Saxo Bank analyst Kay Van-Petersen. He’s the same guy who correctly predicted the $2,000 price in December 2017 in a report called “Outrageous Predictions.” Now he’s making an even bigger bet: Bitcoin could be worth $100,000 or more in 10 years.
Hold on to that stash, Bitcoin Bros.
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Here’s how he came to that conclusion, according to CNBC. It’s all about the market cap and supply of Bitcoin in circulation:
Van-Petersen is assuming cryptocurrencies in general – not just bitcoin – will account for 10 percent of the average daily volumes (ADV) of fiat currency trade in 10 years. Foreign exchange ADV currently stands at just over $5 trillion, according to the Bank for International Settlements.
Ten percent of $5 trillion is $500 billion. This is the ADV that cryptocurrencies could have. Bitcoin will account for 35 percent of that market share, which would that $175 billion of the $500 billion figure, he said. This would mean that $175 billion worth of bitcoin would be traded every day.
Also, Van-Petersen then implies that bitcoin’s market capitalization would be ten times the average daily volume, giving a figure of $1.75 trillion for the market cap. The current figure is around $37.8 billion, according to data from industry website CoinDesk.
Bitcoin has a limited supply of 21 million which is expected to be reached by the year 2140. In 10 years, the analyst thinks that there will be 17 million bitcoin in circulation, up from the current 16.3 million figure.
If the potential 17 million of bitcoins in supply is divided by the $1.75 trillion market cap estimate, then each bitcoin would be worth just over $100,000.
This is bad news for all the finance wonks calling Bitcoin a fad: The guy has a proven track record of calling Bitcoin’s big games. OR is it a giant ploy to short BitCoin and manipulate the market with an optimistic report that will send armchair Bitcoin speculators to gobble up more cryptocurrency at $2300 a pop? Time will tell..
Then again, in the world of digital currency, is the future that easy to write? Or is it just…