Image for post
Image for post

How High Can Bitcoin Go? A $1 Million 10-Year Price Target (Or $1 per dSAT) Actually Looks Reasonable

Lou Kerner
Jan 3 · 5 min read

Subscribe to our weekly crypto newsletter

Amara’s Law — We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.

With bitcoin hitting new highs, an ever-present question is … how high can bitcoin go? The tl;dr answer is:

  1. Crypto is the biggest thing to happen in the history of humanity
  2. Amara’s law suggests we’re underestimating the impact of bitcoin
  3. At parity with $1 (100 cents = 100 sats = 1 dSat or dollar SAT ) bitcoin is worth $1M
  4. While it’s difficult to comprehend a market capitalization of $18.5 trillion ($1M per Bitcoin), we get there by achieving just 5% of the global market cap of stocks and bonds in 2031, or equaling the value of gold in 2031, or by adding the same value per day that Apple has added since March

I’ve written about the folly of predicting bitcoin’s price even one year out, but that hasn’t stopped me from making price predictions before. So while this is a price prediction I’ll stand by, this is more about giving context to bitcoin $1 million.

I know many will laugh at me. And maybe they’re right. But I’m not writing this to convince the naysayers. This is for the growing community of people (including Michael Saylor, Paul Tudor Jones, Stanley Druckenmiller, Bill Miller….) who have seen the crypto light. And I’ve been laughed at before for making seemingly outlandish predictions, and been proven right. So ….

$1 Per dSat = $1 Million Per Bitcoin

The atomic unit of the dollar is $0.01, or one cent. And 100 of those atomic units are referred to as a dollar.

A bitcoin can be divided in to 100 million atomic units, or satoshis (or sats for short).

And 100 of those atomic units are referred to (by me) as a Dollar Sat, or dSat for short.

If 100 of the atomic units of bitcoin reaches parity with 100 of the atomic units of a dollar, then we have bitcoin $1 million.

A value of $1 per dSat would equate to a $18.5 trillion in fully diluted market cap for bitcoin (that assume 2.5 million lost bitcoin, a low estimate). The human mind struggles to comprehend a number that large, so we often dismiss it out of our own inability to put it into context. So the rest of this piece gives context to $18.5 trillion.

The Market Cap Of The U.S. Dollar (i.e. M2) Is $19.2 Trillion, And Growing FAST

M2 includes all cash and coins in circulation and checking accounts (M1), plus money in savings accounts and money market funds that can easily be converted in to cash.

Since the latest round of quantitative easing started in March 2020, M2 has grown by an astounding $4.7 trillion. And M2 will continue to grow in to the future, with expectations of another $1.2 trillion in 2021.

So $18.5 trillion is less than four times the amount of dollars the Federal Reserve has printed in just the last nine months.

Image for post
Image for post

Apple’s Epic Rise To $2.3 Trillion In Value Includes $4.7 Billion In Value Accretion Per Day Since March 2020

Apple was the first company to reach $1 trillion in market cap in August 2018, 42 years after it’s founding, averaging $64.7 million in value creation every day during that time to achieve the $1 trillion in value.

It took Apple just two years and 17 days to add another $1 trillion in value. That works out to $1.3 billion in value created every day for those747 days.

However, we entered a new monetary world beginning March 15, 2020, when the Fed embarked on a large-scale program to stabilize a collapsing economy given the impact of COVID-19. The market bottomed the following day. Since then, Apple has averaged $4.7 billion in value creation every day.

If bitcoin averaged $4.7 billion of value creation starting today, it would hit $18.5 trillion on Sept. 14, 2031. That would be a growth rate of 36% per year for the next 10 years.

To put 36% growth per year for 10 years in to context, Netflix was the best-performing stock of the last decade, growing 43.7% per year. So it’s been done, but not often.

Bitcoin Reaches $1M At Just 5% Share Of The Total Market Cap Of Global Stocks And Bonds In 2031

Given where the total market caps of stocks and bonds are today, and assuming historic growth rates, bitcoin reaches $1 million in value by capturing 5% of the value of those markets in 2031:

Image for post
Image for post

Is 5% reasonable? You can decide for yourself, but it doesn’t feel unreasonable to me given bitcoin’s unique properties.

Bitcoin Reaches $1M If It Equals Gold’s Market Cap In 2031

Given where total market cap of gold is today, bitcoin reaches $1 million in value by equaling the value of gold in 2031:

Image for post
Image for post

Given all the innovation bitcoin is bringing to the store-of-value ecosystem, it could easily double in value. So bitcoin equaling the value of gold in 10 years seems the most reasonable of the assumptions made in this piece.

And remember, it’s not just bitcoin that is going up, it is the dollar that is going down.

Image for post
Image for post
Source: Marketwatch

Subscribe to our weekly crypto newsletter

If you thought this was worth at least .000001 Bitcoin, please HELP US by clapping below (up to 50 times). Thx!

This content is for educational purposes only. It does not constitute trading advice. Past performance does not indicate future results. Do not invest more than you can afford to lose. The author of this article may hold assets mentioned in the piece.

If you found this content engaging, and have an interest in commissioning content of your own, check out Quantum Economics’ Analysis on Demand service.

Quantum Economics

Analysis. Advisory. Money Management

Lou Kerner

Written by

Believe Crypto is the biggest thing to happen in the history of mankind. Focused on stablecoins (founded JustStable.com) & communities (founded. CryptoMondays)

Quantum Economics

Quantum Economics is a publication for all those who wish to gain a greater understanding of why markets move, what influences them, and how you can get ahead of it.

Lou Kerner

Written by

Believe Crypto is the biggest thing to happen in the history of mankind. Focused on stablecoins (founded JustStable.com) & communities (founded. CryptoMondays)

Quantum Economics

Quantum Economics is a publication for all those who wish to gain a greater understanding of why markets move, what influences them, and how you can get ahead of it.

Medium is an open platform where 170 million readers come to find insightful and dynamic thinking. Here, expert and undiscovered voices alike dive into the heart of any topic and bring new ideas to the surface. Learn more

Follow the writers, publications, and topics that matter to you, and you’ll see them on your homepage and in your inbox. Explore

If you have a story to tell, knowledge to share, or a perspective to offer — welcome home. It’s easy and free to post your thinking on any topic. Write on Medium

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store