Bitcoin could reach $100,000, said the CEO of the leading cryptocurrency exchange by volume Binance. Changpeng Zhao (CZ) noted that printing trillions of dollars by the Fed during the current crisis makes it easier to believe that Bitcoin’s market cap could tap $2 trillion.
Bitcoin To $100,000?
The world is going through an unusual phase at the moment. The rapid spread of the novel COVID-19 led to closed cities, countries, and, ultimately, crashing economies. The stock markets felt the pressure almost immediately and recorded some massive decreases. Wall Street, for example, had to halt trading on several occasions due to extensive slumps.
The U.S. government reacted with drastic measures. Those included emergency rate cut to near-zero and stimulus package to bail out the economy that will total $6 trillion. Or, in other words, a quarter of the entire country’s GDP.
The word “trillion” is being thrown around from different directions these days. As such, Binance CEO, Changpeng Zhao (CZ), decided to link it with Bitcoin and to make a daring prediction:
“As we get used to talk about Trillions, a modest $2 trillion market cap of #bitcoin will put 1 BTC at $100,000. Not such a hard to imagine number now, right?
As most BTC are not for sell (HODLers), we only need a small portion of that $2t to buy to reach it.” – he Tweeted.
In other words, if Bitcoin’s market cap reaches the $2 trillion mark, 1 bitcoin will be worth $100,000. A recent report reaffirmed CZ’s second statement. The paper informed that when BTC plunged to $3,700 in mid-March, most panic sales came from short-term holders, while long-term HODLers kept strong and didn’t sell. As they are determined to hold, this means that there are even fewer available bitcoins in circulation to purchase.
It’s also worth noting that Bitcoin’s halving is closing in. After May 2020, the supply of freshly minted BTC will reduce in half. It’s easy to overlook such a massive event given the current financial crisis but it’s going to happen nonetheless. Basic economic principles continue to be in play, because if the demand for Bitcoin remains the same while its supply gets a cut, its’ price should, in theory, go up.
What Does BTC Have To Do?
At the time of this writing, Bitcoin is trading at approximately $6,800. To reach the coveted $100,000 mark, it has to increase its value by more than 1370%. Needless to say, it seems rather far-fetched at the moment.
However, the primary cryptocurrency has previously overcome lots of “far-fetched” predictions and unfavorable odds. In the past decade alone, Bitcoin’s price skyrocketed by 8,900,000%, making it the best performing asset.
Another popular cryptocurrency proponent, Tim Draper, recently made an even bolder BTC prediction. The American venture capitalist investor said that the largest cryptocurrency could reach $250,000 by 2023. If that is to happen, then Bitcoin’s market cap will be close to $5 trillion.
Featured image courtesy of CNBC.