If you have heard anything about Bitcoin, it likely has something to do with its price going up or down. But, for those looking to invest for the long term, there are different questions to ask
What will one bitcoin be worth in the next ten years?
For Bitcoin, there is no foolproof prediction, but Michael Saylor, CEO of MicroStrategy, shared an exciting insight. Saylor sees Bitcoin capable of reaching a market cap of $300 trillion in the long term.
Of course, he did not specify a date because no one can do that, but he is discussing a future goal. And with a market cap of $300 trillion, the price of Bitcoin would be around $14 million. This number definitely got you excited about the next ten years for Bitcoin
Regarding Bitcoin, the original cryptocurrency, here are some reasons why it could go even higher in the next ten years.
- A limited number of bitcoins
- Bitcoin durability
- Bitcoin is open to everyone
A limited number of bitcoins
There is only a finite number of bitcoins in the world and twenty-one million to be exact, so supply and demand will lead to scarcity and a higher value over time. Think of it as $1 per litre at pump gas today due to inflation versus $0.36 in 1970.
Bitcoin also goes through the process of splitting the mining reward every four years, which means that the amount of Bitcoin that is rewarded by mining the coin (through proof of work consensus) will be cut in half. This effectively halves Bitcoin’s inflation rate every four years in a controlled way that anyone around the world can easily track.
Compare that to the central bank target interest rates conundrum, and it becomes clear why Bitcoin is referred to as an inflation hedge—it is deflationary by design.
Bitcoin transactions happen digitally on the blockchain, which makes the currency more durable than dollars or any regular currency. This may sound pedantic, but this is a huge step towards the ease of peer-to-peer digital transactions. Blockchain technology is so secure and efficient that developers are building new tools to improve it every day
As regulation evolves to keep pace, the ecosystem is likely to expand. Ripple’s chief technology officer predicts that the next decade will bring an explosion of low-cost, high-speed payments that will transform the exchange of value the way the Internet has transformed the exchange of information.
Bitcoin is open to everyone
That’s right, everyone can own bitcoin. It is not a gateway for wealthy investors, it is visible in corporate finance offices or only offered to those who got in early. And one of the magic things about bitcoin is that you can buy it in just parts or a few “satoshis”. This opens up the investment opportunity for anyone who wants to invest. Since you don’t have to buy $59,000 worth of bitcoin, you can even buy a small part of it and still profit from your investment.
Bitcoin is a currency for the people, by the people, that gives investors options to hold and store in the traditional stock market, some of which are exclusive to a very wealthy few. These factors create ample opportunity for growth over time, and market volatility shows this upside. The cryptocurrency market provides investors with opportunities that the stock market cannot, giving them an opportunity to reimagine what a truly fruitful financial future looks like.
Bitcoin valuation in the next decade
The next decade is very important for the development of Bitcoin. Revolutions in the financial ecosystem aside, there are two areas of the Bitcoin ecosystem that investors should pay close attention to. Currently, cryptocurrency is between being a store of value and a medium for everyday transactions.
Institutional investors are eager to participate in the action and take advantage of fluctuations in their prices even with the announcement of governments around the world, as it is a valid way to pay for goods and services and is now accepted in many stores, whether digital or on the ground. Still, some scaling and security issues prevented both cases from occurring.
The popularisation of Bitcoin as a payment mechanism, or its appropriation for that matter, has its own growing appeal without technological improvements in its ecosystem.
To be considered a viable investment asset or payment method, the Bitcoin blockchain must be able to handle millions of transactions in a short period of time. This is done through many technologies, such as the “Lightning Network”, which allows for fast transactions and lower fees.
Hard forks on the Bitcoin blockchain, including Bitcoin Cash and Litecoin, were formed due to adjusting ecosystem parameters to handle more transactions faster. Along with improvements to the Bitcoin blockchain, Ripple’s CTO compared Bitcoin to Ford’s Model T in 2018. That comparison doesn’t hold up now, as automaker Ford heralded a transportation revolution. And an entire ecosystem has evolved, from highways to gas stations to service cars. But thanks to heavy media coverage, Ford’s bitcoin ecosystem’s beginnings took hold in the past two years.
So far in 2021, the Bitcoin price has crossed $60,000 before dropping to around $58,000. Big banks continue to pay attention to cryptocurrency, with Goldman Sachs reopening its cryptocurrency trading desk and BNY Mellon opening cryptocurrency custody services.
Bitcoin could be the currency of choice for international trade. This comes as both PayPal and Tesla invested in cryptocurrency in early 2021. Tesla bought $1.5 billion in bitcoin, while PayPal offered to buy cryptocurrency custodian Curv.
Citi also noted that the future of Bitcoin remains very uncertain but is on the cusp of mainstream adoption and acceptance. Citi notes that institutional investor interest is driving widespread interest in cryptocurrencies, but issues related to custody, security, and capital efficiency remain a headwind for digital assets.