There’s been a lot of talk about Bitcoin’s potential to one day reach $1 million per coin – possibly within the next few years.
But is that a reasonable assumption? Here are the data points to consider when assessing Bitcoin’s likelihood of reaching seven figures.
The Halving Cycle
Bitcoin’s monetary issuance schedule is designed to cut the rate of newly issued coins every 210,000 blocks – roughly once every 4 years. These “halvings” are known to be a major catalyst for Bitcoin bull markets, and have thus far unfailingly sent the asset to new all-time highs within two years of their arrival.
Historically, Bitcoin halving cycles peak within 368 to 550 days after the halving, and bottom within 779 to 914 days. Crypto analyst filbfilb on Twitter uses those tops and bottoms to form a “Bitcoin price curve” from which new cycle tops and bottoms can be roughly approximated.
Going by the curve, the analyst projects new tops of over $200,000 per coin in 2025, and $500,000 per coin in 2029.
Assuming Bitcoin Peaks and troughs in a similar fashion to before; here is the key outcomes for the next two cycles based off this model.
>$200k 2025, and $500k in 2029. pic.twitter.com/7MonZKY3PS
— filbfilb (@filbfilb) March 28, 2023
As for the reasonability that Bitcoin could be valued that highly, he noted that the asset could be viewed by markets as a “flight to safety” asset, such as when it appreciated following the collapse of Silicon Valley Bank and Silvergate Bank this month.
“Wealth is mid-transfer from the Boomer generation to the Millennials, who will look to protect their assets like all other generations,” he wrote. “They are likely to do this via means they are familiar with – i.e. digital means.”
Bitcoin VS Gold
The analyst also compared Bitcoin to gold – a historical safe-haven asset that currently has an estimated market cap of roughly $13 trillion. Bitcoin and gold are often noted for their similarities in being forms of fixed-supply money that can be used to escape currency devaluation. Both have shown signs of growth this year as the Federal Reserve announced plans to inject liquidity into the banking system.
Filbfilb noted that if Bitcoin were to entirely capture gold’s market cap, its price per coin would reach $670,000 – though gold is unlikely to be completely devalued.
“Over time, I suspect that two things will happen; a repricing of risk (and therefore the assets which represent risk-off) and a shift from physical to digital, in the same way, we have seen with everything else,” he concluded.
Wealthy tech investors Cathie Wood and Balaji Srinivasan have both predicted that Bitcoin can reach $1 million in recent months. The latter has claimed that this may occur in as quickly as 90 days, placing a $2 million bet that imminent hyperinflation will drive its price to the sky.
By contrast, Wood expects Bitcoin to reach that target by “no later than 2032” – which flibflib says is a “reasonable” assumption.
“I recently stated $180k is the target next cycle; I will stick to that for now,” he concluded.
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