Bitcoin, and digital currency more broadly, is one of the most divisive concepts of our time. Adam is a technology consultant with Altus. The idea of a currency which is not controlled by a state or a corporation and which maintains such a high level of privacy for its users is a much needed relief for some and a threat to the whole economic and political system to others. As bitcoin is primarily used for trading or transferring value, the value of bitcoin is controlled by the total value of goods in transit tied to bitcoin as predictions for bitcoin payment medium.
As more and more trade is taken up using bitcoin as the transaction medium, the value of bitcoin will rise to equal that trade. However, governments cannot control the supply of bitcoin so as the currency becomes more widely used, a continuous increase in the value of bitcoin is predicted. This theory is born out of research undertaken by the World Economic Forum. While many will associate the use of bitcoin with the purchasing of illicit materials from sites such as the now defunct Silk Road, there are now potentially much more lucrative opportunities for criminals.
The dark or shadow economy is estimated to take up somewhere in the region of 17 per cent of the world’s total GDP. Due to the level of anonymity bitcoin provides, there is huge opportunity for its use to avoid anti-money laundering legislation. Any increase in use here would result in a reflected uplift in the value. As bitcoin becomes more pervasive, we predict governments will try to control it, try to understand more detail about how it is being used, and try to monitor its use in the dark economy. However, because of the structure of bitcoin, and the encryption and anonymity which is baked into blockchain, there is very little opportunity to control this. The only clear way for nation states to control the distribution of the currency would be for them to buy up the supply and stockpile bitcoin, as many have done with gold. Regardless of what bitcoin is being used for, the key takeaway is that it is being used more and more widely, and that this expanding use is resulting in a corresponding uplift in value which shows no sign of slowing any time soon.
These views are not necessarily shared by City A. Industry experts always differ in their opinions on how the Bitcoin price will evolve. So far, optimism is still pretty strong, although the price predictions themselves are quite different from what one would expect. We asked a few industry experts how they envision the evolution of the Bitcoin price. The overall bullish sentiment is still in place, for the most part.
Whether or not any of these predictions will come true remains to be seen. 4T market cap divided by the potential supply of 18. The increase will not be proportional, as nowadays the ratio between Bitcoin, ETH and altcoins is not natural. By balancing the ratio, Bitcoin will lose a little bit of ground to ETH and altcoins, but will keep its lead on the market up to a cliff of 50,000 USD, which will be very fast pulled back, probably until the beginning of 2019. As more and more entities are building channels for regular customers, the late majority will enter the stage during the second half of 2019, which will push Bitcoin to 6 digits in 2020. As the preeminent crypto brand, Bitcoin will continue to increase in value.