Happy Birthday, Bitcoin! What’s next for the flagship cryptocurrency?

Just this week, the world’s first cryptocurrency celebrated its 14th birthday. Since its establishment in 2009, Bitcoin (BTC -0.06%) In November 2021, it pioneered an entire asset class and went from being worth a mere penny to an all-time high of just shy of $70,000. In addition to the monumental rise in prices, it was recognized as the official currency. the two countries are occupied by Fortune 500 companies and benefit from an ever-increasing user base thanks to some technological advancements.

Of course, all of this begs the question: Where could Bitcoin be in another 14 years?

A vision of the future based on the present

By 2037, I believe there will be several realities that may emerge for Bitcoin in the future. While I’m sure there will be events that we can’t yet imagine, we should take any predictions with a grain of salt. To be honest, I don’t have a crystal ball. But I have the information and research to base my hopes on.

Let’s start with the low-hanging fruit first. More and more people are buying Bitcoin every year. The number of users holding at least 0.1 bitcoin has grown since 2009, reaching an all-time high of 4.1 million wallets even amid the recent market turmoil. With technological advances like the Lightning Network making it simpler and more affordable to use Bitcoin for everyday transactions, it’s not hard to imagine a future where your favorite retailers accept Bitcoin as payment.

Based on the momentum of more users, I believe that in another 14 years, there will be more countries recognizing Bitcoin as legal tender. El Salvador made history in 2021 when it became the first country to grant it official status, and the Central African Republic followed suit six months later. However, both of these countries are relatively small players on the world economic stage. I wouldn’t be surprised if countries like Nigeria, Thailand, Turkey or Argentina decide to give legal status to Bitcoin by 2037. These countries are home to the largest population of Bitcoin users in the world, and if they decide to make a decision, it could lead to the next lawsuit — a phenomenon known as game theory.

Bitcoin’s next breakthrough will see it become a staple of both individual portfolios and corporate balance sheets. companies like Loyalty already offers Bitcoin exposure for clients and is looking at enabling employers to offer access to Bitcoin to employees through their pension plans. There is also an institutional aspect. Just this year, the world’s largest asset manager, BlackRock, said it will offer its capital-rich institutional clients access to Bitcoin. As leaders in their respective industries, it may be safe to assume that more competitors will follow suit to meet the increased demand.

Additionally, I believe the regulatory environment around Bitcoin will become clearer. Currently, the guidelines and legislation surrounding digital assets are as clear as mud. Last year, countries such as Germany, Brazil and Japan ratified comprehensive legislation, clearing the air and providing better legal guidance. With events like the collapse of cryptocurrency exchange FTX this year, it is likely that a precedent will be set for lawmakers to step in and deliver sooner rather than later. With a comprehensive framework in place, it can give investors more confidence that Bitcoin is a legitimate asset and make the tax environment more favorable and better understood.

All this will lead to an increase in demand. And with more demand and less supply, prices go up. By 2037, Bitcoin will have undergone four more halvings, and approximately 96% of all coins will be in circulation — leaving only 4% to meet the growing demand.

Let’s talk numbers

Based on past data, after each halving, Bitcoin returns less than the previous halving (the most explosive growth was in its early years), but this does not mean that it will not continue to rise. Analysts and bitcoin fanatics like Cathie Wood have called for a $1 million price tag for Bitcoin by 2030. I’m not sure if that could be in the cards any time soon, but even if his team at Ark Invest is only half right, a $500,000 mark in a few years to 2037 will yield 2,800% from today’s bargain price of around $17,000.

Overall, Bitcoin’s potential impact by 2037 will depend on how widely it is adopted and how it is used. While it’s hard to predict what the future holds, it’s clear that Bitcoin could lead to significant changes in the way we think about money and value.

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