McAfee’s latest call for a $2 million bitcoin by the end of 2020 may seem a bit far-fetched but hear him out. Despite even the most optimistic models falling short of that value, here are five reasons why his prediction may not be so crazy.
$2 Million Bitcoin by End of 2020
During an interview with AIBCSummit, McAfee made the seemingly outlandish statement, doubling down on his previous prediction that Bitcoin would hit $1 Million by 2020:
Run the f***ing numbers. If Bitcoin is less than $2 million by the end of 2020, then mathematics itself is a flawed disappointment.
While most sane people, analysts, and economists remain healthily skeptical at McAfee’s words, if Bitcoin has shown us anything so far, it’s that anything can happen.
1. Bitcoin’s Scarcity Will Lead to a Price Surge
Bitcoin is scarce in nature with a capped supply of 21 million. On top of that, seven million have already been lost forever.
As the infrastructure and regulatory landscape continue to improve for institutional investors, the demand for Bitcoin will increase. Increased demand plus scarcity equals a massive price surge. Maybe even all the way to a $2 million bitcoin.
2. $2 Trillion+ Institutional Investment Dollars
Bakkt’s launch has been dire so far, but that doesn’t mean things will continue this way. Institutional investors are likely stalling due to the uncertain regulatory climate in the US.
However, according to data from the Federal Reserve Bank of St Louis, there are currently some $2.14 trillion dollars parked in institutional money funds right now just looking to find a home.
If just a tiny percentage of these find their way into Bitcoin, the price would go hyperbolic.
3. Bitcoin Halving in May 2020
The next Bitcoin halving is coming up around May 2020. This event will hack the mining block reward in half.
Looking back at historical patterns, Bitcoin price tends to boom about a year after each previous halving. That may leave McAfee’s $2 million bitcoin prediction out of time by the end of 2020, but it could be a reality for early 2021.
4. Governments Holding BTC in Central Bank Reserves
OK, so this may not have happened yet. And it may be just starting with Venezuela considering the option, but let’s take a leap here.
If all countries follow the same trend as Pomp enthusiastically believes, the price of bitcoin could indeed go to the moon.
Reports are surfacing that Venezuela is considering holding Bitcoin and Ethereum in their central bank reserves, while also using it to pay organizations.
Every country will eventually do this.
Just a matter of time before the game theory kicks in 🔥https://t.co/oq29xQBtsd
— Pomp 🌪 (@APompliano) September 26, 2019
5. A Global Recession in 2020
The jury is still somewhat out on whether investors consider Bitcoin a safe-haven asset. However, as we’ve seen recently in Hong Kong, Venezuela, and Argentina when macro conditions are ripe, the stock markets tumble, and many investors drift toward Bitcoin.
A $2 million bitcoin by 2020 end? Highly unlikely. But there’s definitely potential for Bitcoin to become so much more than it is today.
Do you think Bitcoin will ever reach $2 Million per coin? Add your thoughts below!
Images via Shutterstock, Twitter @APompliano, Fed chart by fred.stlouisfed.org, video via Youtube @AIBCsummit