Wall street strategist Tom Lee said that his model shows that bitcoin could rise to be worth between $20,000 to $55,000 in the next five years. At current market rates, that's an increase of between 850% and 2350%.
Tom reports that one of the main drivers of bitcoin is that cryptocurrencies in general are replacing the demand for gold. Over time, demand will increase as more investors become aware of bitcoin's advantages. At the same time as demand is increasing, supply will be limited as the maximum threshold of 21 million bitcoins approaches. Thus, you will have a classic case of soaring demand and limited supply driving up prices.
Once the market value of cryptocurrencies tops $500 billion, they will gain a new legitimacy and the central banks will have to consider buying them. Bitcoin and Ethereum already have a market value of $100 billion, so reaching $500 billion is not that much of a stretch. Once the central banks buy in big, you could see a very sudden surge in their market value once again.
Any model is only as good as the assumptions they are based upon and sudden unexpected events could throw this model into disarray, but the bitcoin protocol will only get better as time goes on. Thus, I expect central banks confidence in cryptocurrencies to increase over time, in alignment with that of the public.
This article is not an endorsement to buy bitcoin. As usual, you must perform you own due diligence before buying any security.
If you prefer to watch a video on this topic, I've included one below from Fidelity
