Analysis by Cane Island’s Timothy Peterson suggests that bitcoin price will indeed come to be counted in the millions, based on current adoption rate. But before we all start immediately ordering Lambos, this won’t be happening for at least a decade, according to Peterson’s calculations.
Because… Metcalfe’s Law?
Bitcoin price predictions are pretty much ten-a-penny around here. After all, predictions cost nothing (except in terms of reputation) and price still generates the majority of public interest in bitcoin.
But if you’re gonna start swinging round a prediction in the millions of dollars, then you need some cojones. If being proved wrong may result in the removal of said cojones, then even more so.
Thankfully, that’s not the case this time, and Peterson cheerfully announced his prediction on Twitter, stating that:
bitcoin’s adoption rate implies a price into the millions
Alongside a comparison chart of adoption rates for Bitcoin and the internet, and the disclaimer that it wouldn’t happen “for at least a decade.”
Peterson’s analysis relies on Metcalfe’s Law, which states that ‘the value of a network is proportional to the square of its user numbers’.
So, if bitcoin adoption happens at a similar rate to internet adoption, then in a decade, user numbers should imply a price of seven figures… if it does follow Metcalfe’s Law.
Thus far, if you squint a bit, then the bitcoin adoption graph does roughly reflect that of internet adoption. With the caveat that active wallet addresses are down from late-2017 highs, which didn’t happen to internet penetration. It must also be noted that the y-scale of the graphs is pretty arbitrary, equating 100,000,000 active bitcoin addresses to 100% internet penetration.
It might also be relevant to question why we should expect bitcoin and internet adoption to correlate. Bitcoin is a product competing in the cryptocurrency space, whereas the Internet was n entirely new space to be discovered.
Peterson is Big on Bitcoin Analyses
Despite the inclusion of certain assumptions which may or may not be valid, Peterson is consistently producing fresh analysis in the cryptocurrency space.
Recently he has published blog post championing bitcoin’s ‘never look back price‘, and applied a ‘Monte Carlo’ financial simulation to declare that the leading cryptocurrency’s price would never again drop to $6000.
Do you think Bitcoin will reach into the millions? Add your thoughts in the comment section below.
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