Now that Kay Van-Petersen's prediction of bitcoin topping the $2,000 mark has proven right, the Saxo Bank global macro strategist has made a new long-term call on the cryptocurrency: Bitcoin’s price has the potential to cross $100,000 in 10 years.

In December, Saxo Bank’s issued its “Outrageous Predictions For 2017” report that included the $2,000 threshold. On May 31, Van-Petersen told CNBC that bitcoin’s price could see a meteoric rise that would translate to an increase of more than 3000% from its recent record high.

The numbers are based on Van-Petersen’s prediction that cryptocurrencies will be equal to 10% of the average daily volumes (ADV) of fiat currency trade in 10 years. Trading in foreign exchange (FX) markets averaged $5.1 trillion per day in April 2016, according to the Triennial Central Bank Survey of FX and over-the-counter (OTC) derivatives markets. The figure was down from the $5.4 trillion reported in April 2013.

Ten percent of $5.1 trillion indicates around $510 billion of average daily volumes (ADV). With Bitcoin accounting for 35% of the market share, it alone would account for $175 billions in average daily volume. Going by Van-Petersen’s analysis, the market capitalization for Bitcoin would be 10 times the average daily volume, translating into a whopping $1.75 trillion.

Bitcoins come into circulation through a process called Bitcoin mining. Since the amount of new Bitcoin released with each mined block (called the block reward) is halved every 210,000 blocks, or roughly every four years, it is estimated that this diminishing block reward will result in a total release of Bitcoin that approaches 21 million. According to current Bitcoin protocol, 21 million is the cap and no more will be mined after that number has been attained. The 21 million cap would be reached only by 2140. It is further projected that in the next 10 years, Bitcoins in circulation would potentially be around 17 million. Based on this figure, coupled with the projected market capitalization, Van-Petersen has given a price estimate of $100,000 for each Bitcoin. (See also: What is Bitcoin Mining?)

Recently, the overall market capitalization for cryptocurrencies crossed the $100 billion mark, primarily driven by Bitcoin and Ethereum. The surge in Ethereum’s price beyond $300 has taken it past $110 billion in less than a week. (See also: Bitcoin Price Hits New All-Time High, Overall Market Cap Crosses $100 Billion)

Note:Van-Petersen's views are not the official view of Saxo Bank.

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