Bitcoin Price Reaches a Record High
Over the weekend, bitcoin climbed to a record high above US$6,000. New highs for bitcoin is not all that surprising. It seems to climb higher and higher every month.
The token is now up approximately 500% year-to-date:
Source: Coin Desk
When will this rise end? There of course has to be an end point. Bitcoin cannot continue rising forever. But that end might still be a long way away.
According to some analysts, bitcoin could rise as high as US$25,000 by 2022. And that would be a conservative estimate, according to FundStrat Global Advisor co-founder, Tom Lee.
As reported by Crypto Coins News:
‘In the first episode of Business Insider’s web segment “the bit”, Lee explained his methodology in arriving at the $25,000 number — which he says is a conservative estimate. He revealed that FundStrat values bitcoin similarly to how it would value a social network — using a principle known as Metcalfe’s law. He says that, according to Metcalfe’s law, the value of a network is the square number of its users.’
‘…if you build a very simple model valuing bitcoin as the square function number of users times the average transaction value. 94% of the bitcoin moved over the past four years is explained by that equation…
‘And if personal information is our gold, bitcoin is our digital gold. So we think that the gold market, which is 9 trillion, and for a generation of investors gold was their store of value. I think this next generation of young people view bitcoin as their store of value.’
Lee estimates bitcoin could capture around 5% of the US$2.4 trillion gold market. Of course these are just estimates. I would take any prediction on bitcoin with a grand of salt.
But it would be hard to argue that bitcoin wouldn’t continue to rise as it becomes easier to trade the token.
But even if bitcoin was to disappear tomorrow, the underlying blockchain technology would remain. Distributed ledger technology is become a huge growing industry. Companies are seeing the benefits of adopting such a method of recording and holding information.
Even universities, like Massachusetts Institute of Technology (MIT), are using blockchain technology to store and record degrees.
Bloomberg columnist, Matt Levine wrote:
‘This summer, as part of a pilot program, a cohort of 111 graduates became the first to have the option to receive their diplomas on their smartphones via an app, in addition to the traditional format. The pilot resulted from a partnership between the MIT Registrar’s Office and Learning Machine, a Cambridge, Massachusetts-based software development company.
‘The app is called Blockcerts Wallet, and it enables students to quickly and easily get a verifiable, tamper-proof version of their diploma that they can share with employers, schools, family, and friends. To ensure the security of the diploma, the pilot utilizes the same blockchain technology that powers the digital currency Bitcoin.’
This bitcoin boom isn’t over yet. It’s not too late to learn more about this revolutionary technology sweeping the globe.
Junior Analyst, Money Morning