The latest trend of cryptocurrency mining and trading has left the financial world awestruck. The overwhelming support and investor participation that the cryptocurrency market has received in the past year has left everyone thinking whether this is the currency of the future.
It has been almost 9 years since Bitcoin came into existence and in no time this cryptocurrency has turned out to be one of the most widely accepted ways of sending money across the globe. One of the major reasons why Bitcoin has witnessed such a wide acceptance is because it is completely decentralized and allows users to transfer money across the globe with absolute no additional banking or transnational costs involved. You are the bank and you control your own money.
However, many analysts across the globe who have been actively involved in purchasing or trading Bitcoins, say that the new cryptocurrency is very much poised to stay here and can reach newer heights in coming years.
Kay Van-Petersen, who is a Bitcoin investor, last year predicted that Bitcoin will surge to a price of $2000 in 2017. Well, looking today, the price has climbed over 4 times beyond his expectations and is constantly inching towards new heights every day.
Van-Petersen believes that cryptocurrency is the next big revolution in Financial Technology and in the coming 10 years, cryptocurrencies would account for almost 10% of Average Daily Volumes (ADV) of the existing fiat currencies. As on date, ADV for foreign exchange stands to $5 trillion. Considering 10% of this i.e. $500 billion would be contributed by cryptocurrencies.
Out of this, Van-Petersen assumes that Bitcoin will account for 35% of transactions which is $175 billion worth of transactions daily. And the Bitcoin market cap is expected to be ten times this which is almost $1.75 trillion, a huge figure in itself. The total number of Bitcoins is limited to 21 million. However, as per several predictions, it is believed that 17 million Bitcoins will be in circulation in the coming ten years. So assuming $1.75 trillion market cap with 17 million Bitcoins, a simple math will put the value of each Bitcoin at $100,000 after 10 years.
Peter Smith, Blockchain CEO and co-founder and Jeremy Lieu, the first investor in Snapchat believes that Bitcoin currently is nowhere to its actual potential and predicts that its price could go to around $500,000 by 2030.
The prediction is based on the assumption that cross-border electronic money transfers have doubled in past 15 years and would grow exponentially in the coming years. The two said, “Expats sending money home have found in Bitcoin an inexpensive alternative, and we assume that the percentage of Bitcoin-based remittances will sharply increase with greater Bitcoin awareness.”
Moreover, the two believe that owing to political uncertainty among the developed and developing nations, the participation of global investors in Bitcoin will increase many times over. They said, “We believe Bitcoin awareness, high liquidity, ease of transport and continued market outperformance as geopolitical risks mount, will make Bitcoin a strong contender for investment at a consumer and investor level.”
However, even though there is a lot of optimism in the market relating to the price of Bitcoin, one thing to be noted that it is still under the close scrutiny of major regulatory bodies across the globe. One of the major concerns raised is the decentralized nature of the exchange. Regulators have been arguing that the use of Bitcoin is quite exposed to transactions for dubious and suspicious activities and can even be used by the global drug cartel and mafia. This has left many worried as for whether to legalise Bitcoin or not.
It remains to be seen as to how Bitcoin backed by the Blockchain technology can overcome all the security concerns raised by the regulators and pave the way for more secure and safe transactions. Looking to the current euphoria and positivity which is surrounding Bitcoin, if all the odds fall in favour of this cryptocurrency, one thing is sure that the rise in coming years will be meteoric.
Where do you think Bitcoin will be in 20 years?