Many people in the crypto space often mention bitcoin (BTC) reaching $1 million per coin. Most notably is John McAfee and his aggressive statement declaring $1 million with certainty. John McAfee stated that $1 million per BTC by 2020 is a conservative projection.
John McAfee is a well-known figure in the cryptocurrency space. McAfee and his team from the late 1980’s created the “first commercial antivirus software“. McAfee’s is known for making outlandish and bold statements in the crypto space – even saying he would eat his own male anatomy if bitcoin did not reach $1 million by 2020.
$1 million per BTC by 2020 may be a bit ambitious, but within the next 10-20 years may not be that ridiculous.
Only 21 million bitcoin will ever exist, with a worldwide human population of about 7.6 billion. If BTC becomes mainstream, and its potential/value is realized globally, only 21 million people will be able to own one entire coin. This has the potential to create a future atmosphere for extremely high demand, with very little supply.
Institutions are likely already accumulating bitcoin at current prices (and even possibly waiting for lower prices). But many times, the public is not aware of said accumulation. Vinny Lingham, the co-founder of Civic, explains that the biggest investors do not rely on exchanges to accumulate. Instead, they use Over-The-Counter (OTC) trading. OTC is trading settled outside of exchanges, so as not to move the correlated asset price significantly in either direction, resulting in slippage. (Slippage is when a person buys a large order of bitcoin on an exchange, for example, and must pay a higher price for part of the order, due to an insufficient amount of sellers at the currently listed price.)
Why might institutions be accumulating now? Because of scarcity. CBOE and CME bitcoin futures are currently settled in cash. This does not require BTC accumulation. Profits or losses are paid in cash. However, future mainstream bitcoin trading developments may warrant the purchase of BTC by large players.
For example, the VanEck-SolidX bitcoin ETF (delayed until late December 2018) will have a price tag of $200,000 per share. For a BTC ETF, the fund would need to hold the actual amount of BTC (as opposed to cash-settled futures). This means they would need to buy a substantial amount of BTC, leading to less supply available for retail (public) trade and use, given the scarce supply.
Major crypto exchange Coinbase also already has over 25 million users, as of October 4, 2018. As Youtuber Sunny Decree points out in one of his videos, there is now not enough total bitcoin to supply every Coinbase user with one whole BTC.
Why The Focus On Bitcoin And Not Alts?
Many participants in the crypto space wonder why the oldest cryptocurrency (BTC) is still the best and has the best chance to succeed among the 1500+ altcoins, questioning Bitcoin’s inability to work effectively when mass public usage is applied (as seen last December/January).
At the top of the last crypto bull market, bitcoin transactions took significantly longer to send/receive, with fees up to $50 per transaction at one point. Scaling has since been the topic of significant development, seeing the recent launch of Bitcoin’s Liquid and Lightning Networks. Put simply, these networks for bitcoin help provide a solution for more room for traffic and transactions.
Notable maximalist Tone Vays makes many good points, saying that it “isn’t old news” and that it “is where all the latest innovation and development is taking place”.
Cliff High, the creator of the Web Bot, also realizes the future impact for bitcoin, stating that it “is going to retain its status because of the emotional attachment we already have, its proven capabilities”, and its ability to be attack-resistant, among other reasons. Bitcoin has become firmly established in the public eye, which is difficult to change.
Only time will tell what happens in the future. But right now, the future looks strong for bitcoin, even during a bear market.
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