This week, a chart predicting an astronomical Bitcoin (BTC) price made its way around social media. The world of cryptocurrency has been abuzz with talk about how much money you could make if this ever becomes true.
In a Twitter post to their over 800,000 followers, Documenting Bitcoin shared a chart listing store-of-value assets, making the case that BTC could perhaps reach a price tag of $10 million.
The crypto enthusiast says,
"Bitcoin has the potential to become worth over $10 million a coin."
The chart was created by pseudonymous cryptocurrency supporter Croseus BTC, in January 2021. They released a details explanation in a blog post back in 2021.
The analyst listed several different assets, including gold and stocks. He then deduced what percentage Bitcoin might take from each one by comparing it with current market trends in those categories and its growth potential for the future.
The analyzer believes that Bitcoin's potential market cap is around $206.9 trillion. With the maximum supply of BTC being 21 million, that would bring its price to approximately $9.85M per bitcoin.
"Those who deeply understand Bitcoin tend to view its potential as at least that of gold (~$13 trillion)…."
With a market capitalization of over $13 trillion, 1 BTC would be worth around $619,047.
The crypto markets have been waiting for years to see if BTC would eventually surpass gold. A report issued by financial services firm deVere Group in November 2020 surveyed Millennials about their thoughts on the two most popular assets – gold and cryptocurrency.
"More than two-thirds (67%) of the 700+ Millennial clients surveyed said that they think Bitcoin competes better against gold as a safe-haven asset."
DeVere Group CEO and founder Nigel Green said of the data,
"Bitcoin has been around a little more than a decade but already accounts for more than 3% of gold's $9 trillion market cap.
Millennials will become an increasingly important market participant in the coming years, with the largest-ever generational transfer of wealth – predicted to be more than $60 trillion – from Baby Boomers to Millennials taking place."
BTC is currently trading at $23,948 as of writing.
The Bitcoin price would have to do more than 400x from its current valuation of around $23,948 per coin for it to reach a whopping $10 million.
Regarding the evolution of the price of Bitcoin, Zhao started from the idea of the most notable peaks in the price of the cryptocurrency, also referring to the existing resistance of around $20,000 per unit. Here he indicated that there is a psychological barrier preventing its price from going lower despite the current crypto winter.
Regarding the drop in Bitcoin prices, the CEO of Binance defended that BTC has remained around the aforementioned mark despite events as catastrophic as the fall of the Terra ecosystem and the large sale made by Tesla in recent months. But just as it has fallen, it has also shown remarkable moments, such as the increase seen these days after the announcements related to the US economy.
Although many analysts seek to establish relationships between Bitcoin and other indicators in the stock markets, Zhao stressed that crowd psychology applies more to cryptocurrencies, so these are cycles that will react based on the behavior of traders:
"Last week, the indicators rose as the cryptocurrency price rallied. However, when the bull run ended and currencies fell again, so did sentiment among investors."