Throughout the 2017 crypto market #bull run, bitcoin price predictions kept the crypto hype train fat and happy. Whether it was eccentric ICO #promoter John McAfee promising to emasculate himself if bitcoin failed to reach $1 million within three years or #Fundstrat setting a “conservative” price target at $25,000, every crypto #influencer had a price target — and most represented significant upside, often in the extremely short-term.
Increasingly, though, such #optimistic — and specific — bitcoin price targets seem like a relic from a bygone era. Even Tom #Lee, perhaps Wall Street’s biggest crypto #bull, rage-quit the bitcoin price prediction game, complaining that the #market failed to recognize that the asset’s true value was far above its current level.
#Lucid: Global Debt Crisis Creates Major #Opportunity for Bitcoin
Against this bearish #backdrop, asset management firm Lucid Investment Strategies is breaking away from the pack to make a bull call that sounds like a #throwback to 2017: The bitcoin price could one day reach $10 million, become the new #gold #standard, and solve the world’s debt crisis.
According to #Lucid, the ratio of global debt to wealth has spiraled out of control, creating a “#grotesque imbalance” of wealth #inequality. As of the end of 2018, total world debt was an estimated $247 trillion, compared to $317 trillion in total world #wealth. But while #global wealth continues to outpace debt, the gap is quickly closing; Over the past 20 years, debt has #ballooned by 394 percent, while #wealth has climbed just 133 percent.
Writing in a new report, Lucid claims that this status quo is not sustainable and that the world #economy must eventually locate a #solution to address the debt crisis. The five most likely strategies, the firm says, are the adoption of a gold #standard, the creation of a new #commodity/currency basket, economic growth, outright default on #sovereign debt, or #mass investment in bitcoin.
While perhaps not the likeliest #outcome, the firm maintains that bitcoin is the best #alternative since it would provide a “#permanent fix” to the debt crisis while limiting the damage that will inevitably #accompany widespread economic upheaval.
From the #report, which was drafted by Lucid President and Chief Investment Officer Dean Tyler Jenks and Executive Vice President Leah #Wald:
[I]s this [mass bitcoin adoption] feasible? Probably not. But we believe it is possible and we believe it offers the greatest #benefits with the least collateral damage to the least number of individuals, #corporations, institutions, and countries. Most importantly, it would provide a permanent fix, a #quality that none of the other solutions provide.
Were this to #occur, the bitcoin price would inevitably enter the stratosphere. But how high could it go? Lucid says that $10 million is a good #estimate.
Why $10 million? At that level, #Bitcoin would provide a sufficient #reserve to alleviate the world debt burden. #Bitcoin would be worth between $180 #trillion and $210 trillion (depending on when that price was reached). Assuming world #debt had reached $500 trillion at that time, remember it has grown by 394% over the past 20 years, Bitcoin would represent a 40% reserve against the debt.
How the Bitcoin Price Could Climb to $10 Million
From there, the report #examines what sort of path #bitcoin would have to take to reach the $10 million mark from where it is today, knee-deep in a 13-month bear #market and languishing near the $3,500 mark.
The first step, of course, is breaking out of that #slump. Unfortunately, that might happen later rather than sooner. Like many analysts, Lucid believes that the bitcoin price has not yet bottomed — far from it, in fact — but will likely crash below the $1,000 mark before the #firesale runs its course.
Exposing Altcoins as Cheap Knockoffs
One important trigger for #establishing a bottom will be the “utter decimation” of altcoins and initial coin offering (ICO) tokens, which will prove once and for all that bitcoin is digital gold, and its so-called #competitors are just cheap knockoffs.
The next big step in this #journey will be the utter decimation of altcoins, ICOs and the realization of the important attributes of Bitcoin. That #process has begun, but the regulators must #regulate. We believe they will. During this time, #Bitcoin will continue to lose value, but at a much slower rate than its #competitors.
With the bottom in and no more #nonsense about “building a better bitcoin,” the flagship cryptocurrency would begin to grind #upwards. After facing initial #resistance, the bitcoin price would begin to quicken its ascent as it breaks through key technical #hurdles on its way to setting a new all-time high around $20,000.
Replacing Gold as Premier Store of Value
Bitcoin’s next major #challenge would come at $100,000, the mark at which it would begin to rival gold as the world’s premier #economic hedge. If investors begin to sell gold for bitcoin, the cryptocurrency could quickly eclipse the yellow #metal. If not, the path would be slower, though still possible.
Scaling, Institutional Adoption, & Regulatory Clarity
Notably, it’s also here that Lucid believes developers must begin delivering on promises to scale the cryptocurrency’s protocol to accommodate a much more crowded network. Scaling, coupled with institutional adoption and regulatory clarity, would put bitcoin on track to become not just a store of value, but the world’s reserve currency.
“This accomplished, the road to $1 million will smooth and straighten. The hurtles will be $1 million both psychologically and financially,” Jenks and Wald wrote. “At $1 million, Bitcoin will have a market cap of $18 trillion. It will be in the major league of asset classes and pockets of wealth. It will be a contender.”
As the fastest growing #asset class in world history, it will no longer be ignored by #pension funds, #sovereign #wealth funds, institutional money managers, endowments, #financial institutions, and even #governments. These will fuel the trip, at high speed to $10 million.
When Pricing Bitcoin, Ask the Right Question
Again, Lucid acknowledged up front that this thought #experiment is unlikely to manifest in the real #economy. However, they maintain that it could happen, and if it could happen, then why shouldn’t bitcoin bulls #gamble that it will, even if only to a much smaller degree?
“Do we believe Bitcoin will be chosen [as the solution to the debt crisis]? That is the wrong question,” Jenks and Wald said as they concluded the #report. “The right question is: will there be a choice? Alternatively, will the economic disequilibrium force #resolution, probably default?”