Can Bitcoin really hit $100k? If so, then when?

David McNeal
Nov 7, 2019 · 4 min read

To answer this question, there are a few things to consider:

The Next Bitcoin Halving

There’s a rule in Bitcoin’s monetary protocol that causes the rewards for mining new bitcoins to be cut in half every four years (roughly). Miners currently earn an average of 1800 Bitcoins per day, which in 2020 will be reduced to 900 Bitcoins. The halving will act as a distinct price trigger with less Bitcoin being distributed into circulation and increased demand.

The next Bitcoin halving in May 2020 will be the third halving. The first halving happened in November 2012. Then after 4 years, the second one happened in July 2016. Both previous halving events were the precedent for a significant wave of Bitcoin acceptance, and a considerable appreciation in Bitcoin’s price was reflected within the following year.

Basic Economics — Supply and Demand

It’s also plausible that speculators may cause a spike in demand prior to the next halving in anticipation of a price increase.

The price of any product is driven by the demand and supply it sees in the open market. Take a look at the combined demand of the BTC across all the markets. The increase in trading volume has a direct relationship with both demand and price rise.

However, while the supply of Bitcoin will decrease, its demand won’t. And as people who are familiar with basic economics might tell, this lopsided relationship between supply and demand will help increase the price of Bitcoin.

Never Underestimate the Effects of Inflation

Today the inflation rate is less than the US dollar and after May 2020 it will be less than that of gold. In 2024 it drops below 1% and then heads toward zero. Bitcoin’s price (in dollars) will continue to rise exponentially as the number of dollars in circulation rises exponentially.

Bitcoin is a “safe haven” asset, like gold, and the price movement of a safe haven asset is different than the price movement of consumable goods.

Safe haven assets have slow, gradual, downward price movements (when economic times are “good”), followed by massive, upward, rocket-ship revaluations higher (when economic times are “bad”); these massive upward price movements (during a crisis) account for the number of dollars that have been printed.

Institutional Trading is Heating Up

There is currently only a bit more than $2B in crypto. There was a large study done by JPMorgan, which found out that every $1B that goes into crypto increases the market cap by $50B.

So, this means that the actual FIAT money that went into crypto over the last few years is only 2% of what the total amount of cryptos are worth and that there is only $2.2B in crypto total right now, because $2.2B * 50 =$110B, that’s what all crypto is currently worth.

At the height of the last bull run, there were around $20B in crypto.

Say Bitcoin reaches a $30,000 price and a $240B market cap, we would probably be at a total $1T market cap.

There is only $20B entering crypto needed this year, since every $1B that enters crypto, increases the market cap by $50B.

BAKKT, Fidelity and ETFs could easily add $10B to this, which would make the crypto market increase by 5x alone.

Add small investors and Bitcoin whales, and we are at $20B and a $1T total market cap again like last year, where we topped out at $800B total crypto market cap.

To reach $100K the market cap will have to be about $2 trillion. This is around one quarter of the market cap of gold and 1/7 of the US money supply. Models based on stock to flow suggest $100K could be reached before 2024.

Other Technologies

Germany has always been open to adopt new technological changes as and when it comes. The next wave of demand might come for another cryptocurrency other than bitcoin.

IOTA from Berlin has been partnering up with a lot of Tier 1 and Tier 2 companies for the payment solutions for the self driving car, an interesting area to carefully watch. Some of the major German companies along with Reputable Universities are doing state-of-the-art research to explore other potential applications of Blockchain in the automotive industry.

Another example to consider is Facebook’s Libra:

Within 1–2 years of time frame there might be another wave of buying spree and it would come from the successful adoption of Libra. Facebook has recently announced that it would release a major coin with the help of a few companies. This if successful, would pave the way for a huge amount of people rushing in to buy some BTC for the obvious reasons of FOMO.

Conclusion

With the The Halving only we should reach $10,000. With institutional investors and smaller investors added, we can for sure hit $30,000 this year and $200,000 in 2021. Fast forward to the end of the 21st century, and regardless of how powerful our GPUs might become, they’ll be able to mine only 0.0017 Bitcoins per day.

How much will the price increase? Nobody knows. But based on Bitcoin’s recent history — which has seen its price increasing 400% since 2013 — one thing is for sure: $100,000 mark will be in the sight of Bitcoin.

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David McNeal

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The Cryptowriter — Cryptocurrency | Trading | Blockchain | FinTech | Compliance

The Startup

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