Asset manager Lucid says the price of bitcoin may one day reach $ 10 million. | Source: Shutterstock
By CCN.com: Throughout the cryptographic market's upward run in 2017, bitcoin price expectations have preserved the excitement and frenzy of the encrypted train. That it is the eccentric promoter of the OIC, John McAfee, promising to s & # 39; emasculate If Bitcoin did not reach $ 1 million within three years or Fundstrat set a "Tory"Target price at $ 25,000, each crypto influencer had a price target – and most represented a significant upside potential, often in the very near term.
More and more, however, such price targets, optimistic – and specific – of bitcoin, seem to be a remnant of a bygone era. Even Tom Lee, perhaps the biggest encrypted bull on Wall Street, rage-quit the Bitcoin price prediction game, complaining that the market did not recognize that the actual value of the asset was well above its current level.
Lucid: The global debt crisis creates a major opportunity for Bitcoin
In this bearish context, the asset management company Lucid investment strategies is breaking with the pack to get closer to 2017: The price of bitcoin could one day reach $ 10 million, become the new gold standard and solve the global debt crisis.
According to Lucid, the world debt / wealth ratio has escaped uncontrollable, creating a "grotesque imbalance" of wealth inequality. By the end of 2018, total global debt was estimated at $ 247 trillion, compared with $ 317 trillion in global wealth. But if world wealth continues to exceed debt, the gap is shrinking rapidly; Over the past 20 years, debt has exploded by 394%, while wealth has increased by only 133%.
Write in a new reportLucid says the status quo is unsustainable and the global economy must finally find a solution to deal with the debt crisis. According to the company, the five most likely strategies are the adoption of a gold standard, the creation of a new basket of commodities / currencies, economic growth, the absolute default of sovereign debt or massive investment in bitcoins.
Although this may not be the most likely outcome, the company says that Bitcoin is the best solution, as it would bring a "permanent solution" to the debt crisis while limiting the damage that will inevitably accompany widespread economic upheaval.
The report, written by Lucid's president and chief investment officer, Tyler Jenks, and executive vice-president Leah Wald, states:
[I]that's it [mass bitcoin adoption] feasible? Probably not. But we believe that this is possible and that we believe that it offers the best benefits with the least collateral damage to at least individuals, societies, institutions and countries. Most importantly, this would provide a permanent solution, a quality that no other solutions offer.
If this happens, the price of bitcoin will inevitably enter the stratosphere. But how high could it go? Lucid says that $ 10 million is a good estimate.
Why $ 10 million? At this level, Bitcoin would be a sufficient reserve to ease the burden of global debt. Bitcoin will be worth between $ 180 trillion and $ 210 trillion (depending on when that price was met). Assuming that global debt reaches $ 500 trillion at the time, remember that it has increased by 394% over the last 20 years, Bitcoin would represent a 40% reserve against debt.
How could the price of bitcoin reach $ 10 million?
The price of bitcoin is expected to increase by approximately 285,614.3% to reach $ 10 million.From there, the report examines the type of path Bitcoin should take to reach the $ 10 million mark from its current level, halfway through a 13-month bear market and languishing near the 3,500 mark. $.
The first step, of course, is getting out of this crisis. Unfortunately, this could happen later than earlier. Like many analysts, Lucid believes that the price of bitcoin has not yet touched – far from it, in fact – but may collapse below the $ 1,000 mark before the end of the sale.
Exposing Altcoins as cheap imitations
An important trigger for establishing a fund will be the "total decimation" of the altcoins and initial offer of parts (ICO), who will prove once and for all that Bitcoin is the numerical goldand his so-called competitors are only cheap imitations.
The next big step of this journey will be the total decimation of altcoins, ICOs and achievement of the important attributes of Bitcoin. This process has begun, but regulators need to regulate. We believe that they will do it. Meanwhile, Bitcoin will continue to lose value, but at a much slower pace than its competitors.
With the background and more nonsense about "build a better bitcoin"The lighthouse cryptocurrency would start creaking up." After being struck by initial resistance, the price of bitcoin would begin to accelerate when overcoming the key technical hurdles to reach a new high. unprecedented, at about $ 20,000.
Replacement of gold as the first store of value
At around $ 100,000, Bitcoin would begin to put pressure on gold investors, Lucid said. | Source: ShutterstockThe next big challenge for Bitcoin would be $ 100,000, the mark it would start at rival of gold first global economic hurdle. If investors start selling gold for Bitcoin, cryptocurrency could quickly eclipse the yellow metal. Otherwise, the path would be slower, although still possible.
Scaling up, Institutional Adoption and Regulatory Clarity
It's also here that Lucid thinks developers need to start keeping their promises: scale the cryptocurrency protocol to accommodate a much more congested network. Scaling up, coupled with institutional adoption and clarity of regulation, would allow bitcoin to become not only a store of value, but the world reserve currency.
"This accomplished, the road to the million dollars will flatten and recover. The amount will be one million dollars both psychologically and financially, "wrote Jenks and Wald. "At $ 1 million, Bitcoin will have a market capitalization of $ 18 trillion. This will be in the major league of asset classes and pockets of wealth. It will be a candidate. "
As the fastest growing asset class in the history of the world, pension funds, sovereign wealth funds, institutional fund managers, endowments, financial institutions and even the most governments will no longer ignore it. These will fuel the trip, at high speed, to $ 10 million.
When pricing Bitcoin, ask the right question
The logarithmic diagram of Bitcoin suggests that the situation is not as serious for its long-term supporters.Again, Lucid recognized from the outset that it was unlikely that this thought experience would manifest itself in the real economy. However, they maintain that it could and if that could happen, then why not Bitcoin bulls play as it will, even if to a much smaller extent?
"Do we believe that Bitcoin will be chosen? [as the solution to the debt crisis]? That's not the right question, "said Jenks and Wald at the time of closing the report. "The good question is: will there be a choice? If not, will the resolution of the economic imbalance force probably fail? "
Featured image of Shutterstock. Price table of TradingView.