Forex Market Overview & rough projection
Forex is the biggest market and its daily volume approximated $5,000B in 2016. The graphic below shows the evolution of Forex trading volume over 15 years.
The volume is increasing approximately by 4% annually for the last ten years.
Projection of this volume for the ten coming years using the same rate gives $7,625B as of 2027.
Bitcoin Daily Volume projection
On the other side, the transaction volume for BTC is exponentially increasing especially during the last three years and this trend might continue with even a steeper slope.
The graphic below shows historical BTC transaction volume in term of USD.
I approximated the transaction volume using a simple polynomial function (red one). I did not want to use complex forecasting models since this study aims at roughly estimating future price of BTC. Through the model above, I will be able to make projection for the coming years.
- Scenario 1: Forcasted daily volume of Bitcoin over the ten coming years shows almost $80B in dollar transactions which represents a small 1.05% (= $80B/$7,625B) from the global Forex market.
- Scenario 2: The first scenario forecast is very conservative since many analysts pushed this ratio to 5% = $380B.
Bitcoin Daily Volume projection
Over the years, Bitcoin supply will increase however it is very difficult to predict how mining power will improve in the future or mining technology will hit the wall. From the draw below, I expect the number of Bitcoin in circulation as of 2027 to be almost 20 Million.
I wanted to estimate the number of Bitcoin traded on a daily basis in 2027. I looked at the last three years to see the ratio of traded BTC over the total BTC supply as observed below.
Again, I will be conservative to say that the ratio of Bitcoin traded will be between 3% and 7%. Aggressive scenarios might be higher because none doubt about the popularity's increase of the cryptocurrencies and blockchain in general.
So, Bitcoin daily volume will be between 0.6M BTC to 1.6M BTC ( 20M BTC * [3% to 7%] ).
Price Of Bitcoin in 2027
The pricing will be based on the two scenarios listed above.
- Scenario 1: $80B / 0.6M BTC = $133K per BTC and if we have 1.6M BTC trading daily then the price of the Bitcoin will be $80B/1.6M BTC = $50K per BTC.
- Scenario 2: $380B / 0.6M BTC = $633K per BTC and if we have 1.6M BTC trading daily then the price of the Bitcoin will be $380B/1.6M BTC = $237K per BTC.
Finally, Bitcoin price is far from it is current level and I think it is worth buy it.
Disclaimer: This is not a buy recommendation. This is an analysis based on some objective hypothesis.