Bitcoin, and the world of cryptocurrency, is filled with predictions that will cause the whipsaw effect: “You Said WHAT???” And, with the #Consensus17 hashtag trending as the largest industry event enters day two, the whipsaw effect might be turned up to 11.
Probably the most outlandish prediction to date comes from this Quartz article, which talks about what Wences Casares had to say at a private dinner event – one of the dozens taking place at Consensus – just last night.
Long story short, Casares suggests taking 1% of your net worth and parking it in Bitcoin, then ignoring it for several years, up to a decade.
Casares pretty much says that he’s either betting on complete failure of the Bitcoin ecosystem – odds he puts at “20%” – or a runaway success that makes each Bitcoin worth…well…here’s his quote:
If it fails, it will be worthless,” he says. “If it succeeds, in five to seven years it [one bitcoin] will be worth more than a million dollars.” He puts the chances of success at greater than 50%.
Orders of Magnitude
On the one hand, that’s a darn outlandish prediction.
But, on the other hand…
A couple months ago, Bitcoin was trading at around $1,000 per coin. Today, it’s in the $2,200 range, more than doubling in a month. And due for a pullback, right?
Contrast this with the growth of Ripple’s XRP token, which has gone from a half a penny to 30-plus cents each so far this year, and Bitcoin looks like a laggard. But talk about the network value (or market capitalization) of Bitcoin, which is right now at just $37 billion, and compare BTC to…what, the market cap of Facebook? That would mean an order of magnitude growth for Bitcoin – and then some – to get to Facebook’s market cap of $400-plus billion.
Once you start making comparisons and looking at the growth of the network, the potential is certainly there.
Of course, we could also see Bitcoin fall flat on its face, take the altcoins with it, and we’re talking about a whole host of ones and zeros that are worth rather close to zero.
About that 1%
So if Mr Cesares says to invest 1% of your net worth, and we take an average figure of…$100,000 (I’m ballparking – yours could be much higher, but think about the average American and this seems like about an average figure), then we’re looking at your investing in 1/2 of a Bitcoin, roughly.
Might take more than $1,000,000 per Bitcoin for the average American to be a millionaire here.
Did we tell you there would be hyperbole at Consensus? We did.
Leave a Reply