Since its inception, opinions about Bitcoin have been polarized between Bitcoin fans and skeptics. Some see Bitcoin as the currency of the future that can solve many fundamental issues of the global economic system; on the other side, some compare Bitcoin to the tulip bubble, claiming it has no value and as such, it will soon disappear.
Either way, Bitcoin seems to always be on its way up. As of August 2024, BTC is trading at $56K, after reaching its all-time high of $75,830 early on this year in March 2024. This has led many analysts and investors to speculate on the magic number of $100,000, a price that a few years ago could provoke angry comments from some Bitcoin skeptics.
But what is the logic behind Bitcoin reaching $100,000? In fact, why do some analysts even predict that BTC might even reach $1M?
So, why can Bitcoin reach $100,000?
The prophecies of Bitcoin hitting $100,000 started somewhere in 2017. At that time, Bitcoin was unstoppable, reaching its all-time high of $19,650, a price that today seems extremely cheap.
Now, we are not predicting that Bitcoin will hit $100,000, but it is important to understand the logic behind the idea.
Here’s the thing: those who believe Bitcoin can reach 100,000 USD or more also believe that Bitcoin will replace the US dollar and all the other fiat currencies, such as the Euro and British pound. As a matter of fact, Bitcoin will be the dominant currency in the world, and therefore, Bitcoin’s total supply has to match the current money supply. Some analysts even predicted 1M and even more; however, let’s stay with the modest prediction of 100K.
A reminder: Bitcoin has a total supply of 21 million bitcoins that can be mined until 2140. So far, as of August 2024, 19,735,926 bitcoins have been mined. In the most optimistic prediction, Bitcoin can replace all existing currencies, and the price per unit can easily surpass $100,000 of today’s USD.
Another factor to bear in mind is that a bitcoin can be divided into 8 decimal places, so the value per unit does not have a true meaning. Imagine a scenario in which central banks cannot print money, then the value of the US dollar or any other fiat currency could rise to extremely high prices.
Even if bitcoin does not replace all fiat currencies but captures 1 percent of today’s assets such as stocks, gold, bonds, etc., then its market cap can reach 1 trillion USD, and in case 21 million Bitcoin were mined, Bitcoin would trade at $47,619. 1 Trillion/21M = 47,619.
In another case, if 4 million bitcoins were lost or stolen, then the price could reach $58,823. 1 Trillion/17M = 58,823.
Reasons why Bitcoin will rise
Other reasons that Bitcoin could increase in value include the fact that some users lost or will lose their keys in the future, which reduces the supply of Bitcoin (researchers claim that 4 million Bitcoins are already lost). This basically reduces the supply of Bitcoin.
Another factor is that Bitcoin mining was created so that as more Bitcoins were mined, it was harder to mine the next bitcoins. This phenomenon can create a scenario in which Bitcoin’s cost per unit increases so that the mining remains profitable. In that aspect, the Bitcoin halving, which occurs every four years, is another crucial factor in BTC’s nature to constantly go up. This was also the case in Bitcoin halving in 2024, although, so far, the price increase was fairly modest.
More reasons for BTC’s price surge include:
- Blockchain development
- The approval of Bitcoin ETFs
- Bitcoin can be used as a protection asset in areas with high inflation rates
- Massive adoption by corporations
Final Word
In sum, even though it seems unreasonable that Bitcoin might hit a six-digit price, there is an explanation behind this prediction.
This article, which was originally written in 2019 and dragged some comments from users claiming it is responsible for saying that – is now actually a legitimate prediction. Yep, Bitcoin can reach $100,000 in the near future.
And, imagine the glory and appreciation the analysts who currently predict that Bitcoin will reach this price get when it happens. Will they be like Nuriel Rubini? Are they gonna write books and lectures in universities? Probably… In some way, it’s better to be the one who believes in Bitcoin than the other way around.
