How high can cryptocurrency mania go? Bitcoin bull and anti-virus software pioneer John McAfee has revised his earlier prediction with a claim that bitcoin's price could hit $1 million by the end of 2020.
On July 17, 2017, McAfee made a big claim. He predicted that 1 bitcoin will be worth $5,000 by the end of 2017. Bitcoin's price hit a high of $19,303.74 on December 17, 2017 and closed the year at $12,629.81.
Using the same prediction model, McAfee previously claimed that bitcoin will hit $500,000 by the end of 2020. Since BTC prices surged much faster in 2017 than he had projected, McAfee revised his claim upward to $1 million by 2020.
Bitcoin Price Prediction Tracker portal, Bircoin.top, explains the mathematics behind McAfee’s prediction.
To achieve the target of $1 million, the price of bitcoin needs to increase at the rate of 0.4840957034310259% per day. Assuming bitcoin will rise at this daily rate, and calculating a compounded rate for the remaining number of days until December 31, 2020, the predicted target seems achievable.
Why Will Bitcoin Spike?
There are numerous reasons quoted behind the prediction of bitcoin’s rise.
- First, the limited number of bitcoins, a total of 21 million, is way short of the number of millionaires and billionaires on the planet. Assuming that the majority will want at least one bitcoin, scarcity will lead to high demand, increasing the price.
- Second, the adoption of bitcoin is increasing, so that will help in raising BTC prices.
- Third, the blockchain technology-based cryptocurrency is still evolving and is considered to be in a nascent stage. This leaves a lot of room for growth, expansion and demand.
- Fourth, the cryptocurrency's market cap, which hovers around $162 billion, is still short of the market cap of other traditional asset classes which includes gold, bonds, or stock market. This suggests there's ample room for growth.
However, despite all the positives listed above, the prediction portal notes that “there is still a lot that can go wrong. Do not invest more than you can afford to lose."
This warning echoes the recent thoughts expressed by investment giant BlackRock, whose global chief investment strategist advised that only investors “who can stomach potentially complete losses” should opt for cryptocurrencies. (For more, see BlackRock Rips Bitcoin: Buy Crypto Only If You're Ready for 'Complete Loss’.)
Predictions happen all the time in the world of trading and investments. Only time will tell if John McAfee’s predictions will bear fruit. For now, the debate will continue.
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