$500,000 Bitcoin? $1,000,000 Bitcoin? Let's do the Math - Calculating the answer to the question "when Moon?" or "when Lambo?"
Bitcoin at a price of $500,000 or even $1,000,000? That sounds like a huge exaggeration, right?
Well, we will do the math on it and see how realistic it sounds when using past performance to predict future performance.
There have been more and more prominent voices lately making insane Bitcoin price predictions. I have listed some of those predictions below:
Wences Casares, CEO of Bitcoin wallet startup Xapo and a member of the PayPal board of directors, predicted in a speech on May 22nd 2017 a Bitcoin price of $1 million in 10 years (link)
Jeremy Liew, the first investor in Snapchat, and Peter Smith, CEO and co-founder of the company Blockchain, predicted a Bitcoin price of $500,000 by 2030. They stated three catalysts which might lead to the predicted Bitcoin price: (link)
- More people will use Bitcoin for remittances from foreign workers sending money to their home country
- Increasing political uncertainty around the globe will drive more people to buy Bitcoin as a safe-haven investment
- The use of smart phones for transactions will open the door for Bitcoin. They estimate that Bitcoin could account for as much as half of the world's non-cash transactions by 2030. They also assume the average number of Bitcoin users will grow from 6.5 million to 400 million.
- John McAfee stated on twitter that Bitcoin will move above $500,000 by 2020. "if not, I will eat my dick on national television" he says. (link)
- Kay Van-Petersen, analyst at Saxo Bank, predicts Bitcoin price will be at least at $100,000 in 10 years. He believes cryptocurrencies will make up 10% of the daily trading volume of foreign currencies. That would add up to 500 billion dollars volume per day. In his calculations, Bitcoin would account for 35% of the cryptocurrencies. That would be 175 billion dollars of daily trading volume. Today Bitcoin has a daily trading volume of about 1.2 billion dollars. (link)
After having discussed what some analysts and entrepreneurs have predicted, let's do our own math.
In the past 6 years Bitcoin experienced a growth of 63,178,69%. That means the value of 1 Bitcoin experienced a multiplication of 631.79 times from $6.10 to $3,860.
The growth has been as follows:
| Year | Growth |
|---|---|
| 2012 | +121.48% |
| 2013 | +5,371.43% |
| 2014 | -57.18% |
| 2015 | 36.67% |
| 2016 | 122.72% |
| 2017 | 286.39% |
If we use the past 6 years as a model for the future, the average annual growth rate (AAGR) would be 980.25%. Using this growth rate, we could expect 1 Bitcoin being worth $4,865,860.13 in 2020.
This insane growth rate is caused by the insane growth rate BTC experienced in 2013 of 5,371.43%.
So let's exclude that year which is a complete outlier compared to other years.
When we exclude the year 2013 we get an average growth of 102.01%. So essentially Bitcoin price will double every year. That does not sound very unlikely since we have seen Bitcoin doubling in value in time spans less than one year.
Using this figure, 1 Bitcoin would be worth $529,973 in about 7 years, meaning end of 2024.
Below you can see all the results I calculated based on different Average Annual Growth Rates (AAGR):
| - | AAGR 2017 | AAGR 2016-17 | AAGR 2015-17 | AAGR 2014-17 | AAGR 2012, 2014-17 |
|---|---|---|---|---|---|
| - | 286.39% | 204.55% | 148.59% | 97.15% | 102.01% |
| 2017 | $3,860.00 | $3,860.00 | $3,860.00 | $3,860.00 | $3,860.00 |
| 2018 | $14,914.51 | $11,755.73 | $9,595.61 | $7,609.93 | $7,797.73 |
| 2019 | $57,627.65 | $35,802.39 | $23,853.83 | $15,002.85 | $15,752.49 |
| 2020 | $222,665.41 | $109,037.13 | $59,298.47 | $29,577.87 | $31,822.21 |
| 2021 | $860,348.83 | $332,075.46 | $147,410.67 | $58,312.29 | $64,285.24 |
| 2022 | $3,324,270.74 | $1,011,344.57 | $366,449.67 | $114,961.73 | $129,865.05 |
| 2023 | $12,844,529.58 | $3,080,076.60 | $910,960.92 | $226,645.17 | $262,345.29 |
| 2024 | $49,629,513.71 | $9,380,454.61 | $2,264,566.88 | $446,827.27 | $529,973.63 |
| 2025 | $191,761,684.59 | $28,568,422.17 | $5,629,509.51 | $880,912.68 | $1,070,619.76 |
So as you can see, it is not unimaginable that 1 Bitcoin can be worth a half a million dollars or more in the next decade.
Next time someone asks you "when moon?" or "when Lambo?" you can use one of the above models and answer: 2024 (or whichever model you see more realistic)
All calculations were performed based on historical price data found on Investing.com (link)
You never know. 😮
Seriously though, with the history of fiat debasement, anything's possible and I'll never completely divest my crypto.
BTW, best practice is to provide links to the sources. Post those links in a reply to this comment and I'll upvote it. Cheers,
Thanks for the hint! I updated the post and added links to all relevant sources. Cheers!
Beautiful! Gives the post a whole new look and feel, don't you think? Gives it undeniable credibility, not to mention making it easier for readers to access the sources for more indepth info should they so desire. Followed, and keep up the good work.
Good day @allthingscrypto I appreciate all the info and hard work thank you :) Love it. Followed
Thank you @elladinenolana for the positive feedback! I really appreciate it!
Odin approves.
ALWAYS hodl at least ONE Bitcoin. You can make some trades etc..but ALWAYS hodl one.
We will reach $100k no matter what.
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STOPNot sure about bitcoin at 500k in 2024. That means you think the cryptomarket will hit 16 Trillion by 2024 and bitcoin will be approx 8T of that. I did some calculations here to show maybe it will hit 150k:
https://steemit.com/cryptocurrency/@kryptonaut/bitcoin-price-in-2025-usd300-000-yes-but-these-things-have-to-happen
I thought about what you said and I made a different calculation.
We have a market cap of $60B and it is estimated that around 5M to 10M unique people are using Bitcoin today. So let's say 7.5M people.
$60B / 7.5M people = $8,000 per person.
$8T / $8,000 = 1B people
So to reach $8T, we would need to expand the Bitcoin community to about 1B unique users. That sounds like a lot, but is it impossible? I don't think so. Facebook was able to build a user base of 2B unique users in a time span of 13 years. (and reached the 1B mark in 12 years) WhatsApp has been able aquire 1B users in 7 years. So it is very much possible for disruptive technologies to experience such an explosion of users.
I hear you and agree that disruptive tech can adopt users at an explosive rate. However I would argue that those had very easy-to-see utility for just about anyone at any age. You don't have to know anything to open a facebook acct - just sign up and start using.
On the other hand, Bitcoin still remains very misunderstood and you have to worry about private keys, wallets, cold storage, exchanges, masternodes, different exchange rates, etc. In other words, Its not that easy yet to get into.
In addition, the crypto market also doesn't have "a face" ...something that brings the market great news everyday. All the average joe sees is the wild bitcoin swings.
I'm a firm believer that blockchain will be a large part of the economy one day. 2017 was an amazing year for crypto. Its not hard to see the crypto market hit 1 Trillion within five years. 8T in eight years is possible but a lot has to go right for the average joe to believe in blockchain for that rate. I think 10-15 years we'll see the numbers you want.
Lastly don't forget that your numbers are for 16T (8 of which is bitcoin). That means 2B people total. In addition you are saying that bitcoin will hold the same amount of weight 50%. I can see bitcoin ruling for a while...i'm not so sure in the long-term.
I agree that it is still hard for the average Joe to understand Bitcoin and to use Bitcoin. But we cannot imagine what kind of platform may adopt Bitcoin in the future and may mask all the difficulties of Bitcoin from the average user. Eventhough I do not like centralized platforms taking control of the aspects of Bitcoin which were intended to decentralize and give the users full control, it might help Bitcoin get mass adoption. Imagine platforms like Facebook or Google Play Store or Apple App Store adopt Bitcoin as payment option and make it the preferred payment option... this could lead to mass adoption. Or it could be a new platform which doesn't exist today. 8 years is like an eternity in the tech world. I think it is conceivable.
Ha - agree: things can move very fast in eight years in tech!
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Thank you so much for sharing all this information! that's great! All the best! Waiting for more posts! :)
Really think by 2025 it will hit 28Miĺl? Wow well 2018 price is right.