Bitcoin Closing In On $100K: The Case For A Future Valuation Of $1 Million

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As an analyst with over two decades of experience in the financial markets, I have witnessed numerous trends and cycles that have shaped the global economy. The current Bitcoin surge has piqued my interest, as it seems to be following a trajectory that could lead to unprecedented growth.

Ever since November 5, the day President-elect Donald Trump was re-elected, Bitcoin has been on an impressive upward trajectory, hitting a fresh record high of $93,300.

After that point, Bitcoin has been fluctuating within a tight band between $89,000 and $92,000, suggesting it might be preparing to reach the $100,000 mark. This leads us to ponder if a price of $1 million per coin could be achievable within the next ten years.

A Long-Term Vision For Investors

VirtualBacon, a market specialist, has thoroughly examined various scenarios, meticulously examining data, patterns, and triggers that might potentially cause Bitcoin’s price to skyrocket by almost 10 times its current value.

According to current market trends, an expert predicts Bitcoin could reach $200,000 within the next one to two years. Yet, he emphasizes that while this is a notable achievement, altcoins might provide higher returns but with increased risk. Typically, they can plummet by 80% to 90% during bear markets.

Compared to other digital currencies (altcoins), Bitcoin appears to be a more secure choice for long-term investments due to its resilience against growing regulatory oversight. VirtualBacon asserts that Bitcoin’s potential doesn’t merely extend to the next couple of years, but rather, it could last for an entire decade or even beyond.

According to VirtualBacon, the reason behind Bitcoin potentially reaching $1 million lies in understanding its inherent usefulness as a means of storing value. The unique aspects of Bitcoin – its limited supply of 21 million units, global accessibility, and immunity to censorship and manipulation – make it an attractive choice compared to traditional investment assets.

According to the expert’s perspective, it’s not just a hypothetical scenario for Bitcoin to be considered the digital equivalent of 21st-century gold; rather, such a market capitalization, comparable to gold’s estimated $13 trillion, might naturally follow as a result.

A significant factor fueling this projected expansion involves a rise in involvement from investment managers, company treasurers, central banking systems, and affluent individuals. Notably, Bitcoin ETFs have experienced unprecedented capital influxes, with a whopping $1 billion invested just last week, signifying an escalating level of institutional trust.

Furthermore, talks within companies like Microsoft about holding Bitcoins strengthens its strategic importance. Even average wealthy individuals are increasingly incorporating Bitcoin into their investment portfolios, making a 1% investment in it common among billionaires.

What Does Bitcoin Need To Reach $1 Million?

To hit the $1 million mark, Bitcoin’s potential should be evaluated considering two key aspects: the expansion of global wealth and the distribution of investments. It’s worth noting that in 2022, the total global wealth was roughly estimated at $454 trillion, with predictions indicating it could surge to around $750 trillion by 2034.

At present, gold accounts for approximately 3.9% of worldwide wealth, while Bitcoin is only at around 0.35%. If Bitcoin’s proportion in global investment portfolios increased to a modest 3%, which is still far less than gold’s share, its market value could skyrocket to an astounding $20 trillion, potentially driving the price per coin up to a million dollars.

Gold’s market capitalization experienced substantial expansion after the introduction of exchange-traded funds in 2004, causing its portfolio allocation to climb from 1.67% to 4.74% within the subsequent ten years.

If Bitcoin continues on a path similar to its current trend, the percentage of total global assets invested in it could potentially increase from 0.35% to over 1.05%. This would mean a market capitalization of around $7.92 trillion, which equates to approximately $395,000 for each Bitcoin. To reach a value of $1 million per Bitcoin without surpassing gold, Bitcoin would need to own about 57% of gold’s projected total market cap by the year 2034.

If Bitcoin’s percentage of the total global wealth were to increase moderately, reaching about 3%, which is only 60% of what gold currently holds, this could potentially lead to a Bitcoin market capitalization of around $20 trillion and a price per Bitcoin of approximately $1 million.

At the time of writing, BTC is trading at $92,240, up 7% every week. 

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2024-11-20 10:35