How long will bitcoin continue to raise?
How much can the cryptocurrency market capitalization grow?
Which is the maximum price bitcoin can reach?
In order to answer these questions, the total market potential of bitcoin and in general of cryptocurrencies should be estimated.
In this post I will analyze "Scenario 1" in which bitcoin is perceived as the new form of gold.
SCENARIO 1 - Bitcoin is the new gold
Gold is currently seen as a store of value and its demand is driven by this historical feature that humans have always given to this metal. In a growing digital world and society, the new gold can by easily become a digital asset with the same "scarcity of supply" characteristics of gold, such as bitcoin.
I believe the next financial crisis will allow to verify this thesis. In these periods the price of gold increases significantly. Will bitcoin be perceived as a store of value even better than gold in the next one? In my opinion the answer is yes.
If this is the correct scenario, we can consider current gold market capitalization as the market potential for bitcoin (or more in general cryptocurrencies).
- If bitcoin will reach 10% of gold market capitaization, its price target can be estimated between 39,000 $ and 49,000 $
- If all cryptocurrencies will be perceived as the new gold, their potential market can be estimated basing on current gold market capitalization. This would mean cryptocurrency prices around 30 times higher than today, November 2017 (e.g. 220,000 $ for bitcoin, 9,000 $ for ethereum).
- Finally, if bitcoin alone will be the new form of digital gold, in order to catch its whole market potential it must reach prices around 400,000 $.
Follow me to read the other scenarios I have developed for bitcoin and cryptocurrency!
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