Bitcoin as we all know is the digital currency of the future. Currently trading at just over $2,500 as at June 5, 2017, the flagship cryptocurrency is deemed to have the potential to reach $100,000 in about 10 years. This would mean an increase of about 3,483% leading to a market capitalization of over $1.75 trillion. The current figure is around $37.8 billion, according World coin Index.
These interesting predictions were made by Bitcoin analyst, Kay Van-Petersen while expressing great optimism in the future of the digital currency.
According to Van-Petersen, generally cryptocurrencies – 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 be $175 billion of the $500 billion figure, he said. This would mean that $175 billion worth of Bitcoin would be traded every day leading to total market capitalization of $1.75 Trillion at 10 times the average daily volume.
Van-Petersen also believes that there would be about 17 million Bitcoins in circulation within the next 10 years and therefore infers that with a global market cap of $1.75 trillion each Bitcoin will be worth approximately $100,000. Presently 16.3 million Bitcoins are in circulation out of a possible 21 million minable Bitcoins.
Amidst the several drawbacks trailing the world’s most popular cryptocurrency, ranging from Scalability issues and fiat conversion difficulty across popular exchanges to criminal reputation which was further enhanced by the WannaCry Ransomware Cyberattack, most analysts just like Van-Petersen believes that the industry is still extremely young and big improvements will come. A few factors will boost Bitcoin adoption including better wallets, easier methods to buy the digital currency, use of it for money transfers in areas like remittances, as well as citizens of countries with volatile economies and currencies buying it.
He further adds that;
Volumes are going up, volatility is going down. A lot of people talk about the volatility, but if you are in Zimbabwe or Venezuela, this volatility is nothing. This is the interesting thing to me. I think in the West, a lot of people view it is as speculative, but emerging markets will get it, their needs will be different.
What are your long term predictions for Bitcoin; let’s hear them in the comments.
I have been in the Cryptocurrency ecosystem for about three years. My passion for this niche of financial tech space inspires me to share with you all I can in the world of Cryptocurrency, Blockchain and financial technology.