Bitcoin Marketcap: $150 Trillion
Do you believe this is going to be the case?
This is the view of Dan Held of Kraken. He states that the store-of-value aspect to Bitcoin will allow it to rival real estate. This is an interesting twist on things.
When the bull run, we tend to see all kinds of forecasts about the cryptocurrency market in general and Bitcoin in particular. Certainly, this is one of the more aggressive price targets out there.
The question is how realistic is it?
To arrive at a conclusion, we have to understand Held's reasoning. According to an article on Blockworks, he looked at the different stores-of-value from the traditional asset classes.
It is best to keep in mind the recent run up in Bitcoin pushed the market cap to just over $1 trillion.
Held starts with the idea of gold. This certainly is viewed by many are a store of value. The market cap of that asset is roughly $10 trillion, or a 10x from this point.
That would put the price of Bitcoin at more than $500K. That is something others have claimed.
Then he took a look at the real estate market.
Real estate, which Held called a “quintessential store-of-value asset across the world,” carries a market cap of about $250 trillion globally.
Here we see something that also makes a great deal of sense. Real estate, like gold, is also a store of value. However, that is not its only use case. In fact, the reality is that it is only a small portion of the entire real estate portfolio. Most enjoy that characteristic but they have other reasons for purchasing real estate (such as to live in).
It is this reasoning that leads him to believe that Bitcoin will pick up a fair portion of this store-of-value total. This is the point where some dispute can enter the picture.
Nevertheless, here is how he summed up his conclusion:
“I think it’s very reasonable to see bitcoin in that $50 trillion to $150 trillion market cap size in its final existence if bitcoin succeeds as a global reserve currency, or gold 2.0,” Held said during CoinDesk’s virtual Bitcoin for Advisors event.
That would put the price of Bitcoin betweek $2.5 million and $7.5 million each. Do you find this likely?
For that to happen, a lot of resources have to be diverted form the present assets that take on the store of value role.
Starting with gold, is that possible? According to the surveys of the Millennials, it definitely is. They prefer Bitcoin over gold by a wide margin (9 to 1 in many instances). The goldbugs are mostly Baby Boomers who are getting up there in years. We will see many of them dying off over the next decade, with their fortunes being passed along to the Millennials.
As for real estate, here is where we encounter a challenge. To believe much of the $10 trillion in gold could end up in Bitcoin makes some sense. However, to consider that a large portion of real estate, like 20% could end up there, seems to crack under logic.
Real estate has purposes far above the store of value. Developments take place because humans need a place for particular activity. With residential projects, it is because people need a place to live. At the same time, commercial building are constructed because people need a place to engage in commerce.
None of this is facilitated by Bitcoin.
While we can make the case, fairly easily, that Bitcoin has massive potential, it seems unlikely that it will eat into the store of value that real estate offers. What we will see is that existing real estate will be tokenized, thus adding to the liquidity, possibly bringing in more investors.
However, that will place the value within the cryptocurrency arena and not Bitcoin specifically.
What are your thoughts on this subject?
Article by @taskmaster4450le.
Posted Using LeoFinance Beta
