Future of Crypto — The Potential of Crypto Currencies
People are excited about Crypto today. Its broken the three year down trend. The market is singing…’The only way is up, Baby!’
Well, ok, sure. I am sure the future is fantastic. Yet EXPECT a highly volatile market for the next 12 months. Lead by Bitcoin…$11,000, $13,000, $10,000, $14,000, $9,000, $20,000… you get the idea.
Well I hope you do get the idea. Up down up down YET trend is up. So buy now.
The question is ‘who far can prices go?’ What is the potential of Crypto?
There are endless people predicting the price of Bitcoin. Most of them have been so wrong so often, its amazing they even get quoted today.
And then there are those make predictions so far away, its a massive ‘who cares!’ ‘I think Bitcoin will be $50,000 per coin in 2030’. 2030? Who cares. Why was this even reported!
To predict future markets, one must look at the ‘use case’ for the product in terms of problems solved or opportunity created. In Crypto, lets look at the ‘currency’ opportunity.
Currency is either Medium of Exchange [to allow buying and selling] or Store of Value [how we store our wealth].
Medium of Exchange is currently in ‘fiat’ government issued currency. The ‘broad money’ (ie. cash or very liquid cash-like form) in the world is $US80trillion. https://www.marketplace.org/2017/10/30/world/how-much-money-there-world/
The total Currency Store of Value is in Gold, Silver and Diamonds. Approx $7trillion. 99% in gold.
1. The best technology to create digital money which also allows governments to eliminate cash and manage transactions [to scoop taxes and control the economy!] Some countries will be slow to develop crypto-government currencies known as CBDC. Yet, as China is driving hard, the big guys will be total CBDC by 2030 so expect 80% of the worlds currency, by value, to be crypto by 2030. That’s $60trillion.
2. Most of the world will love the convenience of CBDC yet HATE the government control so expect independent cryptos like Bitcoin to be very attractive. Also many countries cannot be trusted with currency so their population will use the independents as well. Thus, its easy to believe that 2–3% of all currency to be in these options, or $1.6-$2.4trillion in value. Lets call it $2trn.
3. Bitcoin is a better store of value than gold as physical gold is a hassle. Its more trusted and recognised yet a hassle. So versus $7trn in gold, its easy to imagine $2trillion for crypto-currencies with Bitcoin being dominant.
Add the numbers up and we can crow about $60+$2+$2 = $64trillion dollars in Crypto. We have to ignore the CBDC so independent crypto-currencies, 95% being Bitcoin, having a value of $4trillion. This puts Bitcoin at $200,000/coin.
So when people, like me, say that Bitcoin should be at least $100,000 / coin. We are actually being conservative. And if you believe a fraction of what I have explained, you will buy as much Bitcoin as you can today [given it’s price is under $50,000].
Last point — Remember a ‘Bundle’, like Dacxi’s is proven to deliver 100% better returns than just Bitcoin with less risk.
Hope the helps.