Is it possible for Bitcoin to reach a price of $1 million? Or is it just exaggerated? Well, let’s see what experts say.
Not many people knew about Bitcoin when it was launched in 2009, not to mention no one knew about it and the purpose of its launch.
Now, almost 13 years after its launch Bitcoin is one of the hottest topics when it comes to investing in cryptocurrencies. Once called ‘Bubble’ by skeptics, Bitcoin is now experiencing growth that has never been seen in its history.
A Brief History Of The Bitcoin Price
The price of Bitcoin began to take its first steps in July 2010, from $0.0008 to $0.08 per coin.
Bitcoin first reached the price of $100 in October 2013. In the same year, but a month later, on November 28th, Bitcoin passed the $1,000 price tag.
Bitcoin surpassed $10,000 for the first time on November 28, 2017. On December 18, 2017, Bitcoin reached a price of $19,783 which held the record as the all-time high Bitcoin price until a few days ago.
Bitcoin crossed this price reaching $20,000 on December 16, 2020, to pass the same price and reach a record $24,225.28 on December 20, 2020. But on the 11th of August 2021, it peaked at $67,566, known as the all-time high Bitcoin price.
2020 A Great Year For Bitcoin – What Caused Its Price To Rise?
Bitcoin in its infancy was not taken seriously. People’s impression of Bitcoin and cryptocurrencies, in general, was that they are tools used for suspicious and criminal activities. Over time, however, Bitcoin proved to be more than just a “bubble” as some call it, becoming a store of value. It was especially the year 2020 when Bitcoin began to be recognized and adopted by many financial institutions.
Paypal, on October 21, 2020, announced that it has integrated cryptocurrencies into its platform.
“I think that there’ll be more and more use cases for cryptocurrencies,” Paypal CEO Dan Schulman noted on the occasion of the integration of cryptocurrencies in PayPal.
The news caused a stir, and after Paypal, other large companies started investing in bigger Bitcoin.
MicroStrategy invested $650 million in Bitcoin. Square also invested $50 million, and Stone Ridge also followed by investing $115 million in Bitcoin.
MicroStrategy has purchased an additional 29,646 bitcoins for $650 million at an average price of $21,925 per #bitcoin and now #hodl an aggregate of 70,470 bitcoins purchased for $1.125 billion at an average price of $15,964 per bitcoin.
Microstrategy CEO Michael Saylor has already become a big supporter of Bitcoin, or as the crypto expert, Ivan On Tech calls him, a real “Chad”. The crypto community is appreciating the promotion that Saylor is doing to Bitcoin. Also “Crypto Daily” in one of his videos, referred to Michael Saylor as “The absolute G”, in the sense that currently, Saylor is playing a significant role in promoting Bitcoin.
Insurance giant Massachusetts Mutual additionally revealed a $100 million investment in Bitcoin for its general investment account. Grayscale also became part of these investments in 2020, reaching $16.4 billion in assets under management.
JP Morgan, once one of Bitcoin’s biggest critics, is now convinced of the power of cryptocurrencies and created a digital coin for payments, and recently stated that gold will suffer as institutional investors buy into bitcoin.
Why Do These Institutional Investments Have Such A Big Impact On The Price Of Bitcoin?
All these investments as seen on the list of Bitcoin Treasuries by these prestigious companies increase people’s trust in Bitcoin since many people did not believe in Bitcoin and its mission.
But now that prestigious companies are investing in Bitcoin; things are different. A company like Microstrategy would not invest $650 million in Bitcoin in vain. Furthermore, when a bank like JP Morgan decides to launch its digital coin for payments, it means that Bitcoin and other cryptocurrencies have value, and their price may increase in the future.
News of these investments has also caused a stir worldwide, increasing the demand for purchasing Bitcoin. And the moment the demand for Bitcoin increases then the price also increases, as the basic rule of economics says, “the greater the demand, the higher the price”.
Will Bitcoin Reach $500K?
The way Bitcoin is growing has led many investors and crypto experts to believe that Bitcoin can reach the $100k mark or even $500k faster than we could think. Back in September 2020, Bloomberg Intelligence analyst Mike McGlone in his analysis had pointed out that Bitcoin could reach the figure of $ 500k or it could fail.
“Much of the broad crypto-asset market echoes 2017’s excesses, but the foundation is firming due to expanding decentralized exchanges (DEXs) and finance (DeFi). Limited supply vs increasing demand is the bottom-line for Bitcoin, with macroeconomic underpinnings that support its march toward the market cap of gold, at a price of $500,000 by some estimates. Or it could fail”, McGlone pointed out.
Further, he went on to describe Bitcoin as “digital gold” and stressed that the main factor in increasing the price of Bitcoin will be the demand for it.
“Growing investor demand, futures participation, and advancing on-chain metrics indicate a firming Bitcoin price base. Mass adoption of the Tether stable coin has negative ramifications for most crypto assets and positive implications for a solitary digital equivalent of gold: Bitcoin,” noted McGlone.
Could Bitcoin Hit $1 Million Mark?
While this may seem like an exaggeration, analysts believe that Bitcoin could reach the 1 million mark. Recently in an interview for Bloomberg, Coinfund’s managing partner and head of liquid investments Seth Ginns said that Bitcoin could reach the $1 million mark by 2022.
“If you look at the pattern recognition of Bitcoin’s 4-year cycles, a $150K to $250K looks like the base case. But here’s the thing; it is becoming an institutional asset class this cycle. When Tesla stepped up from $25K to $35K, up to $150K to $250K, then it consolidated for a while”, pointed Ginns.
“I think we actually can pull forward the next cycle, and see Bitcoin go to $500K to $1 million and then probably consolidate for a few years in that range. But I think we can actually get there in 2021, 2022 time-frame”, stated Ginns.
Moreover, earlier this year, Raoul Pal, the former Goldman Sachs hedge-fund manager who founded Real Vision, said the bitcoin price could hit $1 million in five years. Speaking for Stansberry Research on October 7, he associated such a price increase to a wave of institutional funds flooding “an enormous wall of money” into the asset.
“Just from what I know from all of the institutions, all of the people I speak to, there is an enormous wall of money coming into this,” Pal said
“It’s an enormous wall of money — just the pipes aren’t there to allow people to do it yet, and what’s coming. But it’s on everybody’s radar screen, and there’s a lot of smart people working on it,” he stressed.
The institutionalization of Bitcoin has made its price increase significantly and has made it more credible as a store of value among people. The integration of cryptocurrencies into the Paypal platform gave them even more credibility and reputation. According to experts, with the pace at which Bitcoin is growing and its institutionalization, then its growth is inevitable.