Using 2% Example Inflation Calculations, Bitcoin Will Hit $1 Million Mark In Year 2250
In the recent past, a debate has ranged on whether the most famous cryptocurrency in the world, Bitcoin and if Bitcoin’s market is bullish or bearish. Now, the debate can be put to rest as some savvy researchers have done simple calculations and found that Bitcoin will hit the $1 million mark by the year 2250, Beincrypto reports.
According to the researchers, Bitcoin can be classified as a static asset since its value cannot be affected by internal aspects due to a fixed presence of only 21 million coins. As a result, Bitcoin is independent of the global economy.
The researchers, however, pose that the US dollar cannot be static as its market supply is determined by market forces. The supply of the dollar is determined by the Federal Reserve depending on the liquidity in the economy. Inflation plays a critical role on the value of the dollar.
As per the researchers, inflation distorts the value of an asset in the long term. They gave an example of $1 million deposited in a bank where the inflation rate in that year was 2%, which translates to a purchasing value of 2%. If the inflation rate continued over time, the purchasing power would diminish with time. For investors, they have to come up with new ways of acquiring returns to break even.
Contrary to fiat currency, Bitcoin is immune to inflation as it is virtually capped. In the example above, Bitcoin worth $1 million would increase in value to $1,020,000 within the same period. In other words, just holding Bitcoin for about one year would lead to an increase in overall purchasing power by 2%, while depositing cash in a bank would lead to a decrease by the same amount.
In addition, the researchers explained that increased adoption of Bitcoin would most probably lead to enhanced growth for the investors. When market activities increase, Bitcoin gains in value. Therefore, Bitcoin owners will have evaded inflation while at the same time gain value in terms of their investment.