An analyst who correctly predicted the cryptocurrency's rally this year told the media that a 3,483 percent rise from its recent record high could be marked by ad bitcoin’s price has the potential to hit over $100,000 in 10 years.
One of the forecasts mentioned was calling for bitcoin to hit $2000 in 2017, according to the annual report of Saxo Bank called "Outrageous Predictions" which was published in December.
The target price represented a 165 percent rise as bitcoin was trading at around $754 when this piece was written.
But now a big rise ahead for bitcoin is seen in the long term by Kay Van-Petersen, the analyst behind the call.
10 percent of the average daily volumes (ADV) of fiat currency trade in 10 years will be accounted for by cryptocurrencies in general – not just bitcoin, Van-Petersen is assuming. According to the Bank for International Settlements, foreign exchange ADV currently stands at just over $5 trillion.
Ten percent of $5 trillion is $500 billion. This is the ADV that cryptocurrencies could have. He said that accounting for $175 billion of the $500 billion figure, bitcoin will account for 35 percent of that market share. That means that every day $175 billion worth of bitcoin would be traded.
Also, giving a figure of $1.75 trillion for the market cap, bitcoin's market capitalization would be ten times the average daily volume, Van-Petersen implies. According to data from industry website CoinDesk, the current figure is around $37.8 billion.
It is expected that by the year 2140, the limited supply of 21 million bitcoins would be reached. The analyst thinks that up from the current 16.3 million figure, there will be 17 million bitcoin in circulation in 10 years.
Then each bitcoin would be worth just over $100,000 if the potential 17 million of bitcoins in supply is divided by the $1.75 trillion market cap estimate.
His growth predictions could be "conservative" given that in the year 2013 alone, bitcoin's price grew over 5,000 percent as Van-Petersen – who owns bitcoin – emphasizes that this is a rough calculation. cryptocurrencies will survive in the long run, the analyst said.
"This is not a fad, cryptocurrencies are here to stay," Van-Petersen told CNBC in a phone interview.
"There will emerge two to three main ones. Bitcoin will be one of those. And the reason is the first-mover advantage, the scale and the pioneering."
The analyst said that Van-Petersen's views are not the official view of Saxo Bank.
A string of problems and reputational damage has been faced by the bitcoin industry. An image of being used for illegal means such as buying drugs online has often plagued the digital currency. And fresh in the minds of users is the collapse of MtGnox in 2014, once the world's largest bitcoin exchange. Some members of the exchange are still waiting for compensation.
Some exchanges not allowing people to withdraw their money in fiat currency are among the more recent issues. And after the major WannaCry ransomware cyberattack saw hackers lock peoples' files and ask for bitcoin in exchange to unlock them the view of bitcoin as a currency for criminals is still prevalent.
(Source:www.reuters.com)
One of the forecasts mentioned was calling for bitcoin to hit $2000 in 2017, according to the annual report of Saxo Bank called "Outrageous Predictions" which was published in December.
The target price represented a 165 percent rise as bitcoin was trading at around $754 when this piece was written.
But now a big rise ahead for bitcoin is seen in the long term by Kay Van-Petersen, the analyst behind the call.
10 percent of the average daily volumes (ADV) of fiat currency trade in 10 years will be accounted for by cryptocurrencies in general – not just bitcoin, Van-Petersen is assuming. According to the Bank for International Settlements, foreign exchange ADV currently stands at just over $5 trillion.
Ten percent of $5 trillion is $500 billion. This is the ADV that cryptocurrencies could have. He said that accounting for $175 billion of the $500 billion figure, bitcoin will account for 35 percent of that market share. That means that every day $175 billion worth of bitcoin would be traded.
Also, giving a figure of $1.75 trillion for the market cap, bitcoin's market capitalization would be ten times the average daily volume, Van-Petersen implies. According to data from industry website CoinDesk, the current figure is around $37.8 billion.
It is expected that by the year 2140, the limited supply of 21 million bitcoins would be reached. The analyst thinks that up from the current 16.3 million figure, there will be 17 million bitcoin in circulation in 10 years.
Then each bitcoin would be worth just over $100,000 if the potential 17 million of bitcoins in supply is divided by the $1.75 trillion market cap estimate.
His growth predictions could be "conservative" given that in the year 2013 alone, bitcoin's price grew over 5,000 percent as Van-Petersen – who owns bitcoin – emphasizes that this is a rough calculation. cryptocurrencies will survive in the long run, the analyst said.
"This is not a fad, cryptocurrencies are here to stay," Van-Petersen told CNBC in a phone interview.
"There will emerge two to three main ones. Bitcoin will be one of those. And the reason is the first-mover advantage, the scale and the pioneering."
The analyst said that Van-Petersen's views are not the official view of Saxo Bank.
A string of problems and reputational damage has been faced by the bitcoin industry. An image of being used for illegal means such as buying drugs online has often plagued the digital currency. And fresh in the minds of users is the collapse of MtGnox in 2014, once the world's largest bitcoin exchange. Some members of the exchange are still waiting for compensation.
Some exchanges not allowing people to withdraw their money in fiat currency are among the more recent issues. And after the major WannaCry ransomware cyberattack saw hackers lock peoples' files and ask for bitcoin in exchange to unlock them the view of bitcoin as a currency for criminals is still prevalent.
(Source:www.reuters.com)
