Anytime I read a Bitcoin prediction or some new report about the future price of BTC, I always take it with a grain of salt. With that said, the crypto industry is so nascent and we are all often grasping at straws to try and figure out what exactly is happening to the price of crypto assets and why.
Having some rough idea of the reports that are out there and what others think has some value in my opinion. At the end of the day, markets are made up of people and emotion. The pricing of these assets is based primarily on speculation and understanding the mindset of a speculator carries some degree of value.
The June 2020 Crypto Research Report was just released and in it, they made the following price predictions for BTC, ETH and a few other assets:
These are obviously some bullish predictions. If we just take the closer case scenario and imagine a BTC price of $341,000 by 2025, that's about a 37x return for anyone who's buying Bitcoin today at around $9,000 USD. Annualized, that's a return of about 700% per year.
The Beginning of an Adoption Curve
"We believe that Bitcoin is still at the very start of its adoption curve"
700% per year is a crazy number to think about, but it's not an impossible number to think about.. which is what makes these predictions so fun. While we can take these predictions into consideration when we buy and use them as motivation to continually HODL, we can also look at data that suggests that BTC adoption is continuing to increase, despite the environment around it.
Off-chain velocity is referring to activities on exchanges (mostly speculation/trading).
On-chain velocity is referring to activities off exchanges (peer to peer, transactions, wallet tx ops, etc.).
The data suggests that we're seeing a rise in the level of speculation surrounding BTC and other cryptos and that this rise in speculation has a positive correlation to the price.
More speculators = more buying pressure = higher price? Possibly.
They also discussed this idea that crypto is growing in terms of off-chain velocity more than it is in on-chain velocity. We're seeing a vastly greater increase in the number of people who come to crypto to speculate on a rise in price as opposed to people who come to crypto to actually use it.
I'm not surprised by this at all. Crypto is still an incredibly new industry with incredibly immature technology. A lot of what's happening here is amazing, but much of it is not usable by the average individual. This idea of crypto usability will continue to be one of the most important conversations moving forward.
While speculation may be positively correlated to the price, I don't want to imagine a crypto future where everything is based on speculation (which is currently what the market is -- 99% speculation, 1% use case).
I'd rather see a future where the speculation still exists, but is just a fraction of the on-chain activities. Proving that crypto has a real-world use case where coins like BTC are used as a long-term store of value and wealth transfer and platforms like HIVE, BAT and ETH are utilized for social media, ad money redistribution and DeFi tools.
Whether or not BTC hits this $400k mark, I'll still hope for this future of crypto usability. $400k is a fun number to dream about, but unless we get some real use cases into the hands of the masses, what have we really accomplished?
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