Hold on, investors – you haven’t seen anything yet.
According to Peter Smith, Blockchain CEO/co-founder, and Jeremy Liew, Snapchat’s first investor, bitcoin’s price could hit $500,000 by 2030. The pair made their case for this projection to Business Insider.
There are several factors behind this projection.
Remittance transfers are one reason. Bitcoin transfers to foreign countries have nearly doubled in the past 15 years and account for 0.75% of GDP, according to the World Bank.
The duo claim bitcoin-based remittances will increase sharply as awareness builds.
Political uncertainty in the U.S., the U.K. and developing nations is another factor. As geopolitical risks increase, rising bitcoin awareness combined with ease of transport and continued strong market performance will boost consumer and investor interest in bitcoin.
The growth of mobile transactions is another factor. Non-cash transactions will jump from 15% to 30% over the next decade as smartphone use increases. The total number of smartphone users is expected to reach 1 billion by 2020.
GMSA, a global organization representing mobile phone operators, predicts 90% of new users will be from developing nations. Nearly everyone will be able to have a bank in their pocket. Bitcoin could account for half of these transactions.
Smith and Liew based their projection on the following model drivers.
Also read: Researcher sees major gains ahead for bitcoin, silver and gold
The projections are not definite, considering things could go wrong. There has been a lot of negative news about bitcoin recently.
China, where most bitcoin trading takes place, has cracked down on trading. The three largest bitcoin exchanges have announced a 0.2% fee on all transactions, as well as blocking withdrawals from trading accounts.
The U.S. Securities and Exchange Commission (SEC) rejected two bitcoin ETFs. Another proposed ETF is not expected to be approved.
Smith, however, thinks bitcoin is in its early stages. He said the SEC ruling was not a surprise. Winning such approval could take a long time.
Meanwhile, regulatory approval has occurred elsewhere. Bitcoin became legal payment in Japan on April 1.
Another obstacle is the hard fork, which could cause a split into two bitcoins, regular bitcoin and Bitcoin Unlimited.
Smith is not concerned about the hard fork since there are strong economic incentives to prevent it. He noted that the bitcoin blockchain has operated for more than seven years with no downtime, which no other back-end system operating at the same scale has accomplished.
While the price of bitcoin has been volatile compared to traditional currencies, it has always rallied. After rising 20% in the first week of 2017, it crashed 35% when China cracked down on trading. Since, then, it has recovered those losses and is up 25% for the year.
Featured image from Shutterstock.
Last modified: July 13, 2020 3:13 AM UTC