There's just something about that $1 million mark that causes crypto bulls to froth at the mouth. The VP of blockchain and digital currencies for IBM, Jesse Lund, is one of the most recent industry experts to proclaim that the bitcoin price could hit seven figures.
“I see Bitcoin at a million dollars, maybe $5,000 by the end of the year but a way higher trajectory… that means there’s over $20 trillion of liquidity in this network.”
Bitcoin Bulls Have Been Pounding the Table on $1 Million for Years
Mr. Lund is not the first to predict such a lofty bitcoin price. RT host Max Keiser said on his show in early 2016:
“Most of the people who are on the sidelines not buying bitcoins today will start to buy when it gets over $1,000, and then a greater percentage of people will definitely plow into bitcoin once it trades over a $10,000."
Rick Falkvinge believes it’s reasonable for bitcoin to capture 1% to 10% of the global investor market.
“This leads us to a target market cap of 600 billion to 6 trillion USD, to be fulfilled by about 6 million bitcoin, which makes for easy calculations. That means that each bitcoin would be worth $100,000 at the low market cap and $1,000,000 at the high market cap," he wrote.
A PayPal Board Member Joins the Fray
Wences Casares, CEO of bitcoin service provider Xapo, said on a panel at TechCrunch Disrupt 2015 that he thinks $1 million is not out of the question and may be more likely than not.
"I think that there is a higher than 50 percent chance that a bitcoin is worth more than a million dollars."
Mr. Casares also wrote about his opinion on the Bitcoin.com forum.
“It is hard to estimate how many people on (sic) bitcoins, but it may be somewhere between 13 and 15 million people right now,” he wrote at the time. “If Bitcoin is successful we will see hundreds of millions of people own Bitcoin and, eventually, billions. The only way we can get to billions of people owning Bitcoin is by the price going up by several orders of magnitude, let’s say $ 1 million (but this is highly speculative and risky). So, if I am right, and Bitcoin has to go from $390 to $1,000,000 the best way for it to get there without crashing irreversibly is with as much volatility as possible.”
Trace Mayer, the Bitcoin Knowledge Podcast host, has made multiple cases for a bitcoin price of more than $1 million.
“If you moved just 1% of the cash balances from off shore tax haven bank accounts, which currently hold estimated $30 trillion of value, if you move just 1% of that into bitcoin you are looking at $2.8 million per bitcoin,” he said back in 2013.
John McAfee Puts Skin in the Game
If price increases were in line to reach $1 million by the end of 2020, one bitcoin today should be worth over $39,000, according to an online tracker that measures the progress of John Mcafee’s infamous prediction to cut off his own member should it not reach seven digits by the end of 2020.
That’s quite a prediction. To reach the seven-figure mark in a more conservative timeframe of five years, bitcoin needs to see daily growth of roughly 0.3%. It has exceeded this in the past—the height of the 2017 bull run saw the coin enjoy massive growth on an almost daily basis.
Stable growth throughout the coming year could be crucial, and the first two months of 2019 have proved promising so far, as the price of bitcoin stays relatively steady between $3,500 and $4,200.
While McAfee was the first crypto celebrity to put so much, well, skin in the game with his $1 million bitcoin price prediction, there's something about that seven-figure mark that's simply irresistible to crypto bulls.
This brings us back to IBM VP Jesse Lund's forecast:
“Two billion adults are unbanked yet one billion of those are carrying smartphones,” said Lund. “If the price of Bitcoin were higher, there would be more liquidity and we could be having a different discussion with banks right now.”
Institutional heads echo this, saying that bitcoin needs to find stability at a price that more closely reflects its utility. Best case scenarios include extended and exponential growth for the flagship cryptocurrency.
Maintaining a Long-Term Outlook Even in Frigid Crypto Winter
A substantial price increase is likely to be contingent on what the true utility of cryptocurrency actually is, and this will only become apparent as markets continue to mature. But for the Winklevoss twins, who in 2017 became the first "verified bitcoin billionaires," the cryptocurrency is already close to becoming an effective store of value.
Responding to questions in a Reddit AMA thread, Cameron Winklevoss and brother Tyler - founders of the Gemini exchange - stated that BTC is the most likely “winner” in cryptocurrency markets due to its existing prominence.
“It’s hard to defeat network effects,” Tyler Winklevoss said. “We believe Bitcoin is better at being gold than gold. If we’re right, then over time the market cap of Bitcoin will surpass the $7 trillion market cap of gold.”
This line of thinking relies on bitcoin becoming less volatile than it has been historically. Toward that end, there have been positive developments since the onset of a long 'Crypto Winter,' as proponents dub the consolidation period that began for most cryptocurrencies at the end of 2017 and beginning of 2018.
Markets may be tentatively approaching these conditions. Online trackers show that the usage of Segregated Witness (SegWit) on some days accounts for nearly half of all transactions conducted on the BTC blockchain, which before saw average fees rise to $30 when the number of transactions spiked to 300,000 daily. Previously, this was seen as a huge obstacle to the future of "digital gold."
But, at the time of writing, median transaction fees sit below $0.30, despite recent highs of 360,000 transactions within a 24 hour period. Data indicates that SegWit is working to raise the ceiling for bitcoin and could yet help to realize a value that better represents its utility. This, smart money says, is how a promising start to 2019 will eventually turn into a major bull run.