Reuters / Brendan McDermid
- The price of bitcoin has risen 1700% so far this year.
- Some are calling it a bubble, but there are things that could send the price even higher.
Bitcoin has risen from less than one penny in 2010 to a price of about $ 17,000 as I write this. In 2017 alone, bitcoin’s value has risen by more than 1,700%. So how big could the value of a bitcoin get?
Some experts have suggested that bitcoin could rise to $ 1 million or more, but let’s look at what it might take to get bitcoin to a closer milestone of $ 100,000.
First, what would $ 100,000 bitcoin mean?
There are currently about 16.7 million bitcoins in circulation, so a $ 100,000 per-coin value implies a total valuation of $ 1.67 trillion for all bitcoins. This is certainly a large sum of money, but it isn’t unattainable by any means.
For reference, the global money supply is estimated to be $ 84 trillion, and there is estimated to be $ 280 trillion of total wealth in the world. So if just 0.6% of all global wealth was stored in the form of bitcoin, it would translate to a $ 100,000 bitcoin price. This would be a big leap from the current value of bitcoin, but if the digital currency starts to gain serious traction, it’s not outside the realm of possibilities.
With that in mind, here are four catalysts that could propel bitcoin from its current level of around $ 17,000 as of this writing to a six-figure price tag.
1. Bitcoin becomes much easier to use
There are two sides to a bitcoin transaction if it’s being used as a currency, not just as a speculative investment — the consumer and the merchant. First, let’s look at the main obstacle on the consumer side.
Simply put, bitcoin is not as user-friendly as it needs to be to become a widely used method of payment.
To be fair, bitcoin is much easier to use than it was just a few years ago. However, it’s still a rather complex process for newcomers. An account must be created with a bitcoin exchange like Coinbase, which typically involves sending a photo of your ID and linking your checking account. And unless you have instant-buy capability, you can be waiting several days for your bitcoin to arrive in your wallet.
While I wouldn’t call the process difficult, it is certainly more tedious than pulling cash out of an ATM or swiping your credit card at a merchant.
Many companies, large and small, are engaged in finding ways to solve this problem, and some progress is being made. One particularly promising example is Square, which recently started experimenting with bitcoin in its Square Cash app. If buying and using bitcoins becomes as easy as “swipe right” and then scanning your phone at a payment terminal, it could cause the digital currency’s adoption to explode.
2. Major retailers start accepting bitcoin
There are some online retailers and a handful of brick-and-mortar businesses that accept bitcoin payments, but none of the major players have decided to accept bitcoin just yet.
On the same day this article was written, it was reported that eBay is seriously considering accepting bitcoin as a payment method. Amazon.com has long been rumored to have bitcoin acceptance in the works, which would be the Holy Grail for bitcoin acceptance as a currency. If one of these major retailers, or another of comparable size — say, Wal-Mart or Target — decides to readily accept bitcoin payments for all purchases, it could become a game-changer for bitcoin.
3. Trading activity continues to grow
In 2017, bitcoin transaction volume has grown by 55% and 30,000 new bitcoin wallets are created daily. Since bitcoin isn’t widely accepted as a currency yet, it’s fair to assume that much of this activity is the work of speculators — that is, people who are buying bitcoin for the sole purpose that they think it will increase in value.
At the end of the day, bitcoin’s price is governed in the same way as any other asset — primarily by supply and demand. As long as speculators keep demand ahead of the supply of bitcoins available for sale, the price could continue to rise.
See the rest of the story at Business Insider
