- Bitcoin in the present day and the price action leading up to where we currently are.
- How to answer the question: “How high will Bitcoin go?”
- The various scalability solutions offered by the developers working on Bitcoin.
- A look at the views of people who think the answer is yes to the question “will Bitcoin crash?”.
- A look at the views of people who think Bitcoin will continue to rise.
- My own opinions on the question: “How high will Bitcoin go?”
Table of Contents
- 1 Bitcoin in the Present Day
- 2 Bitcoin’s Recent Months
- 3 The Crash of December/January to Today
- 4 How Far has Bitcoin Got in Terms of Usability?
- 5 How to Answer the Question “How High Will Bitcoin Go?”
- 6 Bitcoin as Digital Gold?
- 7 Problems with Bitcoin?
- 8 The Lightning Network
- 9 SegWit
- 10 Will Bitcoin Crash?
- 11 Fans of Other Cryptos Often call for Lower Bitcoin Prices
- 12 So, How High Will Bitcoin Go?
- 13 My Opinion on How High Will Bitcoin Go
- 14 Conclusion
Bitcoin in the Present DayBefore going into the question of how high will Bitcoin go, let’s inspect the current situation. Bitcoin was developed by an anonymous developer or team of developers called Satoshi Nakamoto. Unlike other crypto projects that have clear leadership, Bitcoin is truly decentralised. Bitcoin itself is nothing more than a database (blockchain) that is stored and updated by a network of computers. These computers are known as miners. They ensure that all transactions follow the network rules. The only way to make changes to the network is to convince enough of these miners to do so. This makes Bitcoin incredibly difficult to change.
Bitcoin’s Recent Months
The Crash of December/January to TodayAt the first sign of trouble in the markets, the novice investors that had piled into Bitcoin at the end of 2017 began to sell their holdings. Many didn’t realise what it was they had bought in to. Not understanding the central value proposition of Bitcoin (that it’s a permission-less system of value transfer immune from government meddling), they sold quickly. Of course, the price decreased fairly quickly as more novice investors began fearing that they might lose a few percentage points in the short term. Their visions of “getting rich quick” faded instantly and instead of discussing how high will Bitcoin go, people were talking about how low will Bitcoin go.. Since many hadn’t even the first idea how to store Bitcoin correctly, their BTC was already at CoinBase or Bitstamp, or whichever exchange they originally used to buy in at. This meant they could sell their holdings at the first sign of their investment becoming unprofitable. Since the Bitcoin market is so small globally, it’s normally a very volatile asset. When the market is overbought with billions in “dumb money”, this volatility is increased massively.
How Far has Bitcoin Got in Terms of Usability?Bitcoin becomes more usable every year. From its early beginnings when many thousands of Bitcoins were used to pay for pieces of cryptography software on forums, Bitcoin has come a long way. Today you can buy almost anything with it online. There are many online stores that will accept Bitcoin. These include Overstock.com and NewEgg.com. You can also pay for holidays using the likes of Expedia.com, gamble at one of many hundreds of online casinos, and can even buy real estate with the cryptocurrency.
How to Answer the Question “How High Will Bitcoin Go?”To answer the question “how high will Bitcoin go” is rather tricky. It depends on its eventual use case. If it becomes the money of the internet that some of its supporters believe it could do, its market capitalization could quite easily reach the trillions. According to Invespcro, in 2017 $2,197 trillion were spent online. That would give Bitcoin a market capitalisation of this figure too. This would make each Bitcoin worth well over $100 million each. Given that the amount of money spent online seems to go up every year, it could go much higher than this. This isn’t just the opinion of some online troll, however. The founder of Twitter, Jack Dorsey, is a firm believer that it will happen in the next ten years!
Bitcoin as Digital Gold?When discussing how high will Bitcoin go, it’s good to compare it with gold. So, another potentially different use case for Bitcoin is that of a store of value. There are many believers in this use case too. They believe that Bitcoin is evolving as a sort of digital gold and it doesn’t even matter if its widely adopted for purchases. Those that see Bitcoin as “digital gold” are hoping that it will one day replace gold as the planets best store of value. Steve Wozniak, the co-founder of Apple firmly believes in Bitcoin as “digital gold”. He also believes that no other cryptocurrency is “pure” enough to be it. This is because of its unique qualities of censorship resistance and complete independence from the whims of any single human or group. Also, there are potentially other sources of gold in the universe too. With just 21 million units, Bitcoin theoretically should hold value better than its shiny, mental, non-digital counterpart. It only takes enough people believing that it is valuable. After all, that’s all any store of value is. Gold is only valuable because you think it is.
Problems with Bitcoin?For Bitcoin to achieve the role of global store of value, there is nothing wrong with the design of it at present. In fact, it works brilliantly for this use case. All that needs to happen is a large shift in the attitudes of the global population. This is entirely possible but could take a couple of generations. However, for Bitcoin to become the currency of the internet, there are some issues with its design. Unfortunately, blockchains are designed for security not speed. Most of the time a new and exciting cryptocurrency emerges that can perform transactions much faster than Bitcoin, the developers haven’t really done anything but reduce the security of the original design. Bitcoin was built to be censorship resistant and impossible to attack. It performs excellently in this regard. This makes it well-suited for the role of store of value. However, Bitcoin is less suited to performing as a medium of exchange for online or real-world purchases. It currently takes around 10 to 20 minutes for a transaction to go through. The network has also become so popular in the past that transaction became very expensive. This is because each block can only process a certain number of transactions.
The Lightning NetworkA company known as Blockstream, along with another group of developers – known as the Core developers – are currently working on a fix to the potentially high transaction costs and waiting times. Their solution is called the Lightning Network. The idea is that people making many repeat transactions with one another will be able to do so without updating the blockchain. This payment channel will bounce money backwards and forwards until one of the parties wants to settle the channel. Following this settlement, the network works out who owes however much Bitcoin and it’s paid. This includes a small fee to the network for updating the blockchain. A successfully launched Lightning Network could mean that micropayments are a reality once again on the Bitcoin network. This could increase the value of each coin many times their current price. If the Lightning Network works properly when it’s launched, the answer to “how high will Bitcoin go” could be much greater than even Jack Dorsey or Steve Wozniak predict!
SegWitTo put things how talented the developers working on Bitcoin are into perspective, consider the last major software upgrade to the network – SegWit. SegWit works by taking some of the data out of transactions so that each takes up less space on the blockchain. SegWit transactions are just as secure as those that occurred the upgrade last August. However, many more of them can now fit into each block. This has essentially doubled the capacity of the network. The SegWit upgrade and the euphoria after it was introduced was one of the factors behind the 2017 Bitcoin bull run that turned into a full-scale speculative bubble.
Will Bitcoin Crash?There are many people out there that think Bitcoin could crash spectacularly. However, very few of these have any understanding of what Bitcoin is. In addition, these are other voices who have an interest in Bitcoin and cryptocurrencies failing. Let’s see if the question how high will Bitcoin go or how low is the one to ask. The likes of Warren Buffet, Charlie Munger, and Jamie Dimon have all argued against the pricing of Bitcoin. Warren Buffet has stated publicly that he believes Bitcoin is “rat poison squared”, Charlie Munger has said that he thinks it’s a “scum-ball activity”, and Jamie Dimon has called Bitcoin a “fraud” in the past. Interestingly, each of these names are ones that are very closely associated with global finance. If Bitcoin realises the ultimate vision of many, there would be no need for the financial institutions that these men represent. Their comments might come from naivety about the public’s growing hatred of central bankers, or they might come from fear – representing a last-ditch effort to persuade people away from the potentially revolutionary innovation.
Fans of Other Cryptos Often call for Lower Bitcoin PricesOther voices that call for lower Bitcoin prices are often proponents of other cryptocurrencies. Many of these got into digital currencies at some point during 2017. They discovered that there were loads of digital currencies and blindly believed that they were all the same other than their transaction times. Knowing little about game theory or the security measures needed to have a truly successful global currency built using blockchain technology, they dismiss Bitcoin as old news. These naysayers will often have a different coin that they champion for whatever reasons. They rarely back their opinion up with anything other than talking about how many more transaction per second their project can perform. They miss the most important aspects of Bitcoin – its decentralisation and censorship resistance.
So, How High Will Bitcoin Go?McAfee stated that Bitcoin would reach $1 million in the same time frame. Another famous Bitcoin bull from a technological background is Alexis Ohanian. Ohanian was the co-founder of the social media forum Reddit. He’s since moved into the investment space and looks out for blockchain projects with the highest potential. He also believes that Bitcoin will exceed the 2017 all-time high in terms of price later this year. He stated so back in May 2018. Finally, a man with a suitable pedigree in terms of making investments is Tom Lee. The former JPMorgan strategist has stated on numerous occasions that Bitcoin will reach $25,000 in 2018. In the longer term, he’s even more bullish and has predicted a $64,000 Bitcoin by the end of 2019.
My Opinion on How High Will Bitcoin GoSo, after all those other opinions on how high will Bitcoin go, here’s my own. Firstly, let’s get one thing clear. This is in no way to be considered as investment advice. As with every investment, buying Bitcoin should only be done after thorough research. You should deeply understand how a blockchain works and the specific applications that Bitcoin thrive in and those that could make it fail. Warning out of the way, let’s consider the question of how high will Bitcoin go. There is certainly a lot going for the digital asset. It’s useful both as a means of payment and to send money across the globe in minutes without the permission of anyone.
- Censorship resistance – Bitcoin is incredibly difficult to change the network rules of. Only if most miners decide something is a good idea will it get voted in. This means that however much governments might want to control Bitcoin, they cannot. There is no central authority that could be bribed or co-opted to cheat the network in some way.
- Permission-less – Just as no one can change the network, neither can someone stop anyone with internet access from using it. It provides banking services to those without them and is truly democratic in its reach.
- Limited in number – the two previous points make Bitcoin something that every single person on the planet should consider owning some of. Their limited supply means that if everyone ever did decide to buy into Bitcoin, the price would quickly reach astronomical levels. When something is rare and in high demand, the price always shoots towards the sky!
ConclusionThat’s it! We’re all done. Together, we’ve explored loads of answers to the question: “How high will Bitcoin go?” I hope you’ve found this guide both educational and entertaining! If you want to dig deeper into Bitcoin predictions, see the complete guide to it here. Before I sign off, let’s have a quick recap about what you’ve learned:
- How the Bitcoin price has performed over the last year.
- What makes Bitcoin special.
- A few of the various ideas about for scaling Bitcoin.
- A few of the views of those who are opposed to Bitcoin.
- Some views of people who think that Bitcoin will continue to rise.
- My own opinions on the question: “How high will Bitcoin go?”
- Will Bitcoin Crash?
- Why is Bitcoin dropping?
- Why is Bitcoin rising?