It has become popular for bloggers and analysts to peer into a crystal ball and come up with long term predictions for the price of Bitcoin, and boy are those figures all over the place. I have heard all sort of numbers bandied around from 'Bitcoin has peaked' (always popular) to 'Bitcoin will be worth $1 million after 2030 and we'll all be rich' (another favorite). Of course since what is defined as 'long term' is pretty far in the future, anything is possible, which makes predictions rather easy. Personally I'll try to come up with a figure bearing a decent probability of being reached in the coming decade.
A good way to proceed is to determine the absolute worst case scenario and the very best case scenario possible, then see between those numbers what is the most probable figure.
So what's the worts case scenario?
That one is easy: no growth! The worst that could realistically happen is that Bitcoin value never gets higher than $3000.
And now for the best case scenario?
That one is a bit harder as we have to look at established currencies and stores of value for clues. The USD M1 money supply stand at around $3.5 trillions while the total capitalization of gold is around $7 trillions. Let's assume that when fully established Bitcoin can reach the same ballpark and estimate the total market cap at $5 trillions, which is about 100 times its current market cap of $50 billions, or a Bitcoin value of $300,000.
And now what is realistic?
So we have a range from $3000 to $300,000. If we consider growth to be exponential like it has been up to now and take the midpoint I would set a target at around $30,000 per Bitcoin for the 2020 to 2025 time period.
This would make Bitcoin an investment with the potential to multiply its value by 10 in less than 10 years. Holding 1 BTC won't allow you to buy a villa or a yacht, but it could buy you a nice driverless car by the time those hit the market.
image creative Commons by by investmentzen