Blockstream’s Adam Back Still Believes Bitcoin Could Surge Past $50,000 With $1 Trillion Market Cap
Bitcoin has come up to reach the high values it is associated with. The cryptocurrency has made significant gains in 2019 and peaked around $14,000 earlier in the year.
The surging prices of Bitcoin have been beneficial to cryptocurrency markets as a whole. The majority of altcoins have experienced price rises over the course of this year, and these gains can be attributed to Bitcoin’s own surge. The rise in Bitcoin’s price triggers an increase in general interest about crypto trading, and this creates an activity around altcoins and pushes their prices up.
Bitcoin Could Surge To $50,000
Adam Back, one of Bitcoin’s pioneers and creator of the Proof of Work protocol which is used for Bitcoin mining, said that the crypto asset could surge by 400% in the near future. Back provided a variety of reasons to support his stance that Bitcoin could rise past $50,000.
Firstly, Back pointed out that whenever the cryptocurrency’s halving occurs, it is followed by a meteoric rise in its price. Halvings create a negative supply shock on the market as less of the asset will be given out as rewards for mining. Bitcoin rewards are due for halving in May next year, and it is expected that there will be a price surge after that.
The second factor pointed out by Back is the geopolitical uncertainty that is affecting money markets and government bond yields. The ongoing US-China trade war has created a lot of panics, and there is no sign that the two nations will reach an agreement anytime soon. There is increased concern in Europe over a possible no deal Brexit. The Argentine Peso recently collapsed following a contentious election and Venezuela’s fiat currency continues to suffer from high inflation.
These geopolitical factors are a handful of the several challenges being faced by governments around the world. Bitcoin is coming in as a solution to the various problems created by the conflicts. Investors in China have turned to Bitcoin as the yuan fell past 7 against the dollar. The public in Venezuela is making use of Bitcoin as they avoid the country’s inflation ridden fiat currency.
When money markets began to falter, investors turned to government bonds. However, these bonds are now producing negative yields due to a variety of factors. Negative yields mean that investors will receive less than what they put in when the time for their investment to pay off comes. About $17 trillion worth of government bonds are currently producing negative yields. As a result, government bonds have become less popular among investors, and Bitcoin has become the asset of choice.
Bring it on, 2020 halvening, lots of geopolitical uncertainty, $15tril of -ve interest bonds, MMT excuses being tested to bring an even more imprudent USD inflation regime.
— Adam Back (@adam3us) September 6, 2019
Bitcoin to benefit
When these factors are put together, it is easy to see why Bitcoin investors could reap big rewards in the future. Other analysts have shared similar sentiments to Back’s opinion that the crypto asset may surge to $50,000. According to popular Twitter analyst PlanB, Bitcoin’s stock to flow ratio model shows that after the scheduled halving, Bitcoin’s market capitalization may rise to $1 trillion. This market capitalization translates to a price of $55,000 per coin.
"The model predicts a bitcoin market value of $1trn after next halving in May 2020, which translates in a bitcoin price of $55,000."https://t.co/n5P5uMCKHT
— PlanB (@100trillionUSD) March 26, 2019