IBM Executive’s $1 Million Dollar Bitcoin (BTC) Price Prediction: Fool’s Gold Or Future Glory?
IBM Executive Believes Bitcoin Will Be Worth 1 Million Dollars
Jesse Lund, IBM’s blockchain and digital currencies manager, recently caused a lot of noise when she claimed that a Bitcoin will be worth 1 million dollars. Whether it’s just wild imagination or real anticipation of the future, her statement caused much controversy in the cryptocurrency business circles.
Optimistic investors supported her claims, but the pessimistic ones started doubting the sustainability of a Bitcoin with that value. People ask about ways the prediction could become true. No one still knows how the Bitcoin could replace the major materialistic values of the modern world, such as national currencies or gold.
What Are The Numbers?
The Bitcoin market has a supply limit of 21 million coins. 36% of that amount are coins that were not yet mined or have been lost. That makes 7.56 million coins out of reach. If that is so, then we can trade with 13.44 million coins.
If each of the 13.44 million coins cost 1 million, that would make the total Bitcoin market value an astonishing 13.44 trillion dollars. China, top 50 billionaires all together, Amazon, Apple, and Facebook, would be worth less than Bitcoin industry. Bitcoin would be the same as 11.7% world’s GDP, 32.5% of the total money and 19.5% of the global stock market.
Bitcoin needs to stabilize or to be higher than it is now so that it could accomplish the predicted value. It is immune to deflation so it’ll be more powerful in the future. Bitcoin is also compatible with the supply-and-demand theory because its supply rate decreases in cycles of around four years.
What Are The Opportunities?
In order to rise to one million dollars, Bitcoin has to be able to replace generally accepted assets. More than 2/3 of the population has a smartphone and can connect to the Internet, but around 1.7 billion of them can’t use financial services that banks provide. That is an advantage Bitcoin can use to be easily accessible to everyone even in the most distant places in the world. That would also make the Bitcoin value more distributable.
In countries with unstable political and economic condition, Bitcoin could be a good alternative. Venezuela and Zimbabwe are suffering from hyperinflation and lots of people from these countries are choosing currencies that are not related to their unstable national government. In Greece and China, there were cases when the government limited currency capital of its people. Results of the measure were increased interest of people for buying digital currencies that are not dependent on the national government. In Iran, Bitcoin was so popular due to US economic sanctions that the government had to ban it. They lifted the ban because it was endangering their national Cryptorial.
This is the way that even economically weak nations could start using cryptocurrencies. Even Wall Street started preparing for a potential Bitcoin dominance, making trading platforms and improving their crypto products.
What Are The Obstacles?
Because Bitcoin is actually modern technology, there are some obstacles it must overcome in order to be worth 1 million dollars. Those are problems with scaling, regulation, and banks.
The block size of a Bitcoin is 1 megabyte. If there are more active transactions, the blockchain record will be slower and create a so-called backlog. Backlog means that the network will need more time to accept a transaction than usual.
In order to resolve this issue, developers Thaddeus Dryja and Joseph Poon made a tool called Lightning network. It’s a payment chain that gets to the blockchain record only when both the sender and receiver finish the transaction process. Even though this doesn’t represent an actual solution for scaling, the Bitcoins get transferred more quickly.
Cryptocurrencies need to have clear regulations that are supported by authorities in order to become widely used by companies and average citizens. It’s important to have fair laws unlike BitLicence proposed by New York State Department of Financial Services. This law almost ruined the cryptocurrency industry because the fee for applying for the required license was 5000 dollars without any guarantees that you will get the license.
Another thing: if the regulations come from the state or global level, that could solve some problems but also could be a threat to the independence of the cryptocurrencies.
Banks should also be involved in the cryptocurrencies trade system. That way banks could ensure the security people need to make a decision to invest in Bitcoin. It’s different when people know they can always sell their coins for real money if they want.
For example, the major bank in India decided to discourage other banks to work with local cryptocurrency traders. This decision caused Indian investors to sell all their cryptocurrencies or transfer them offshore. There are also examples of banks suspending accounts of clients who trade with cryptocurrency or credit card companies that banned their users from buying Bitcoin.
What To Expect In The Future?
Besides solving these problems, Bitcoin growth will vastly depend on technology. Cryptocurrencies could become a widely used asset but the network needs some improvements before that happens. With the stability and widely used technology, Bitcoin could reach even more than 1 million dollars.