Some experts believe that Bitcoin could go from $10,000 to $100,000 in five years.
In a Bloomberg Intelligence report, senior commodity strategist Mike McGlone argues that Bitcoin has a bullish future in the short-term.
Ana Golubova of Kitco News provided an overview of Bitcoin prices over the last decade:
Bitcoin has had an impressive growth cycle in the last ten years, rising from $10 in 2011 to $1,000 in 2013 and to $10,000 in 2017. And even though Bloomberg Intelligence foresees a slightly slower growth path going forward, it does not rule out a $100,000 price tag in 2025.
As of October 24, 2020, Bitcoin was trading at $13,149.42.
“Bitcoin could continue doing what it has for most of its nascent existence, appreciating in price on the back of increasing adoption, but at a slower pace as we see it. The first-born crypto has had a tendency to add zeros to its price from around $10 in 2011. It took about four years to go from $1,000 to $10,000 in 2017, so doubling that time frame for maturation could get the price toward $100,000 in about five more years,” observed Bloomberg Intelligence senior commodity strategist Mike McGlone.
McGlone argued that the main catalyst of the recent surge in Bitcoin price was increased adoption.
“Bitcoin is unique in that supply cannot be influenced by price, leaving adoption as a primary valuation metric,” McGlone remarked in his Bloomberg Intelligence update. “Since initially reaching $10,000 in 2017, the benchmark crypto corrected about 70% and remains in an extended period of consolidation around that level. When Bitcoin first traded at $1,000 in 2013, it corrected about 80% and consolidated. About four years after initially reaching $1,000, it added a zero … Bitcoin has a history of adding zeros.”
The cryptocurrency’s gradually growing market cap is expected to boost adoption, thus leading to higher prices.
“The total value of gold is around $9 trillion vs. only about $190 billion for Bitcoin. For comparison, the benchmark crypto is about half the market cap of Tesla. A big difference is higher prices are increasing the supply of Tesla stock. Bitcoin supply is fixed and declining on an annual percentage basis,” commented McGlone. “At less than $200 billion, the Bitcoin market is too small for many large institutions, including central banks, to add the crypto as part of their holdings, but if the market cap of Bitcoin increases, it becomes increasingly like a digital version of gold.”
Investors could see Bitcoin rise to $14,000 before the end of this year, added McGlone.
The Bloomberg Intelligence analyst contended that Bitcoin is witnessing similar trends to gold.
“Bitcoin, like gold, is in transition to being a beneficiary of increasing stock market volatility, in our view,” McGlone stated. “Our chart depicts the highest Bitcoin-to-gold 12-month correlation in our database since 2010. The crypto 12-month measure vs. the S&P 500 is elevated, but has been higher.”
Gold and Bitcoin have witnessed a concomitant increase in 2020 and are likely to maintain that trend as the stock market gradually slows down.
“The dichotomy of an unchanged U.S. stock market in 2020 nearing the end of 3Q vs. the advancing prices of gold and Bitcoin is a shift toward relative value that we see gaining endurance,” McGlone noted. “If the rapidly advancing stock market of the past decade has run its course … more quantitative easing and rising debt-to-GDP levels are likely, supporting the stores of value.”
Time will tell if the cryptocurrency will supplant the current monetary order. Nevertheless, Bitcoin shows how emerging monetary alternatives can come about in the market through voluntary interactions. Most people who hate the current monetary order should count on possessing gold and established cryptocurrencies such as Bitcoin in their portfolio. It’s a strong political during at a time when people are losing confidence in the conventional monetary order.