Could The US Dollar Help Bitcoin (BTC) Lead A $100 Trillion Crypto Coin Market Cap?
Could The US Dollar Help Bitcoin Reach $100 Trillion Market Cap?
The most popular virtual currency in the world, Bitcoin (BTC), could eventually reach a market capitalization of $100 trillion. Although this seems a joke, it is possible if the US dollar keeps falling as it did in the past. Since 1913, the US dollar purchasing power fell 96%. In the future, the trend could continue.
Bitcoin Could Reach $100 Trillion Market Cap
As the value of Bitcoin grows and the US dollar keeps falling, there may be a moment in which Bitcoin could have a market capitalization of $100 trillion. In 2016, prices in the United States were 2,324 percent higher than what they were in 1913, as reported by the Bureau of Labor Statistics consumer price index. That means that the US dollar had an average annual inflation rate of 3.14% in just over 100 years.
There are other fiat currencies around the world that have lost more of their value in the last years. Some of these countries are Venezuela, Iran or Argentina, among others. Inflation is a problem that many countries experience and that some others do not want to solve. Individuals that do not invest their savings in other assets will clearly lose around 3% each year.
Back in 2011, Bitcoin reached the parity with the US dollar. Each BTC could be traded for just a dollar. If we take inflation into account, that means that nowadays, this parity would be close to $1.12.
At that time, there were many users that held large sums of Bitcoin. Many of them sold when Bitcoin was just under a cent and that regret not storing them for a longer period of time. Other traders preferred to store Bitcoin for a longer period of time and now they are millionaires.
There is a very important difference between the US dollar and Bitcoin. Bitcoin has a very limited supply. There are only 21 million BTC and there will never be more. Meanwhile, there are several trillions of dollars and this number continues to grow as time passes. If the demand for the most popular cryptocurrency increases over time, the price of the digital asset is also expected to grow in the long term.
Due to some similarities with gold, Bitcoin could also become gold 2.0. and offer investors a new store of value. It is just worth to have a look at the historic yearly lows registered by Bitcoin. The virtual currency has registered higher lows year after year. From 2012 until now, Bitcoin lows were: $4, $65, $200, $185, $365, $780, $3200. In 2019, the lowest point could be $3,400 if Bitcoin does not fall under this price level.
Thus, will new monetary policies create and generate hyperinflation? This is something far from reality. However, in the long term, this could happen depending on the policies taken by policymakers and central bankers around the world.
According to the recognized analyst and trader, PlanB, QE will print Bitcoin to $100 trillion in the future. The market analyst Holger Zschaepiz wrote a tweet in which he shows that central banks have pumped $1 trillion in liquidity into global markets.
This chart partly explains the rally of stocks and bonds in Q1. Central Banks have pumped almost $1tn in liquidity into global markets. pic.twitter.com/bk1HBrkyaI
— Holger Zschaepitz (@Schuldensuehner) March 30, 2019
At the time of writing this article, Bitcoin has a market capitalization of $84 billion and each Bitcoin can be purchased for $4,770.