Bitcoin has certainly displayed an impressive performance this year, surging by nearly 60% in value. This year’s gains plus the growing institutional interest in the pioneering cryptocurrency have undoubtedly caught the attention of investors worldwide. After a turbulent 2022 for the crypto market, it’s only natural to wonder whether Bitcoin’s current trajectory could lead it to reach $100,000 as many experts suggest.
Crunching the Numbers
As of Monday, Bitcoin price has popped up over $27,000 in value, showing over a 2% rise within the 24-hour period and the first time it crossed that territory in September 2023. It also boasts a market capitalization near $530 billion.
To assess the possibility of Bitcoin’s price reaching $100,000 within the next five years, we’ll analyze the figures provided by The Motley Fool. If Bitcoin were to ascend to those numbers, it would equate to a substantial 300% gain over the next half-decade.
This translates to an annualized increase of 32%, a feat that could outperform traditional stock market indices like the S&P 500 and Nasdaq Composite. Such returns are nothing short of remarkable.
A Potential $2 Trillion Market Cap
In the hypothetical scenario of Bitcoin reaching $100,000, the financial adviser forecasts that its market capitalization would soar to $2 trillion within five years. While this figure may appear substantial, consider that the total value of all the world’s gold stands at roughly $12.5 trillion.
Bitcoin, as it gains broader legitimacy and acceptance as a store of value, could gradually encroach upon gold’s market cap. Even in this scenario, Bitcoin would represent only 16% of gold’s total value, a seemingly conservative estimate for bullish investors.
Bitcoin in Comparison
At a market capitalization of around $2 trillion, Bitcoin would still fall short of the valuations of tech giants like Apple and Microsoft, with respective values of $2.7 trillion and $2.5 trillion. This perspective puts the $100,000 price target into a reasonable context, considering Bitcoin’s potential growth based on the source.
Why the Growing Demand?
The Motley Fool believes Bitcoin’s primary appeal could lie in its role as a store of wealth. With a limited supply capped at 21 million coins, owning an asset with such scarcity makes sound financial sense.
As demand for Bitcoin continues to rise, coupled with its fixed supply, the stage is set for sustained price appreciation. It warns, however, that it may encounter occasional turbulence along the way.
A Hedge Against Devaluation
Another compelling factor contributing to Bitcoin’s attractiveness is its potential to serve as a store of value compared to fiat currencies. Governments worldwide have witnessed the devaluation of their currencies over the past century, particularly in recent decades.
In the United States, for instance, mounting debt exceeding $33 trillion has raised concerns about the stability of traditional financial and monetary systems. Bitcoin is increasingly seen as a hedge against such systemic risks.
While Bitcoin’s path to $100K is far from guaranteed, it is a plausible scenario given its remarkable 2023 performance and the potential for increased adoption as a store of wealth and a hedge against currency devaluation. If Bitcoin can sustain its upward trajectory and overcome challenges in scalability, regulatory scrutiny, and market volatility, reaching such a milestone within the next five years is not beyond the realm of possibility.
Giancarlo is an economist by profession with a career spanning nearly two decades. His professional journey has seen him assume vital roles in various government and private organizations such as the Department of the Interior and Local Government (DILG), the National Economic and Development Authority (NEDA), Megaworld Corporation, and the China Banking Corporation in the Republic of the Philippines.
In addition to his civic and corporate pursuits, his forward-thinking approach has led him to manage several prominent websites in the banking and finance sector, notably the Australia-based RateChoice, where he immersed himself in the world of emerging financial technologies and where he found particular interest in Bitcoin all the way back to 2013.
Prior to his addition to Blockzeit’s dynamic team, he held an essential role as Project Manager for initiatives encompassing blockchain, stablecoin, mining, special economic zone development, and iGaming. This noteworthy chapter in his career unfolded under the auspices of InPlan Consultancy Services, Inc., the think-tank of IMPERO Consortium Management Corporation headquartered in Manila, Philippines, and Tokyo, Japan. InPlan, led by a distinguished retired Cabinet member of the Philippines, collaborates directly with IMPERO’s core management team, contributing to strategic planning and business development endeavors.