Bitcoin value has increased from zero to about $1,190, making it the top-performing currency in the world in six of the past seven years.
However, Jeremy Liew, the first investor in Snapchat, and Blockchain CEO and cofounder Peter Smith believe that the cryptocurrency isn’t anywhere close to its real potential. They sent a presentation to Business Insider where they argued their case for why bitcoin’s value will become $500,000 by 2030.
Bitcoin’s explosion will happen thanks to:
- Bitcoin Transfers:
Bitcoin is an inexpensive alternative for expats who send money home. With higher Bitcoin awareness, the percentage of Bitcoin-based transfers will increase.
- Future uncertainty:
Due to the increasing geopolitical risks, Bitcoin will become a strong contender for investment at a consumer and investor level, due to its high liquidity, ease of transport and continued market outperformance.
- Mobile phones penetration:
As the world becomes more connected through smartphones, the percentage of non-cash transactions will increase from 15% to 30% in the next 10 years. By 2020, the number of smartphone users is expected to grow to 1 billion, with 90% of these users coming from developing countries.
This means almost anyone will have a bank in their pocket, which will create a boost in bitcoin as well. The two men believe it would account for 50% of all of these transactions.
- Markets Insider
Despite bitcoin not being granted regulatory approval in the US, it’s catching on elsewhere. It has become a legal payment method in Japan on April 1.
Developers are threatening to set up an alternative marketplace for bitcoin, which is another threat to the currency. But there’s no need to worry, according to Smith, he said: “Bitcoin has strong economic incentives to prevent this. If the last two years of healthy contention and debate lead to a conclusion, it’s that Bitcoin is incredibly resilient and stable. In fact, the bitcoin Blockchain has operated for 7+ years with no downtime, a feat no other back-end system operating at this scale can claim.”
Lately, news surrounding bitcoin has been quite negative. China, the country responsible for almost 100% of the currency’s trading, has been cracking down. It announced 0.2% fee on all transactions as well as blocking withdrawals from trading accounts.
Also, two bitcoin exchange-traded funds have been rejected by the US Securities and Exchange Commission with a third ruling coming soon, which is not expected to be approved.
However, Smith believes the currency is still in its early stages, he told Business Insider: “The SEC’s ruling wasn’t a surprise to us. We know that getting this sort of approval is going to take (a potentially long) time,” Smith said. “In the meantime, bitcoin is already simple to buy and hold and, as the asset continues to mature, we’ll continue to see an increase in the development and deployment of surrounding products.”
Anyone interested in investing in the currency must know that it sees sharp price changes which are uncommon among the traditional currencies. In the first week of 2017, bitcoin increased by 29% before falling 35% after China banned its trading.