Absurd Cryptocurrency Claims: How Realistic Are They? Hint...Very
We all heard the "absurd" Bitcoin forecasts. $100,000...$500,000...even $1M.
Well, we just topped it. Yesterday, in a video, @haejin posted a pricing point of $3.6M on BTC. This by far is the highest pricing point I saw on it.
For those who are unaware, @haejin uses technical analysis to derive his conclusions. Much of his chart reading centers around Elliott Wave although he does use a great deal of traditional technical analysis. This is something he has done for 15 years and, from what I can tell, seems rather successful at it.
Many people feel technical analysis is worthless and nothing more than a guessing game. This is a point I am not here to debate; that is for another day. However, @haejin is coming up with some absurd pricing points for not only Bitcoin but also many alt-coins. I suggest you scroll through his blog and dig up some of his longer term charts, they are absolutely crazy (although in his posts he claims to be of sound mind).
But is he of sane mind? Let us be honest, the numbers he tosses out there are outlandish. Only a nutter would believe any of them. Of course, of late, since I appear to turn into one of the top 3 or 5 STEEM cheerleaders, I received some of that same treatment. That said, the multi-billion dollar (or crypto) question is how can these blockchains how so much value? The largest company in the world is not worth $1T yet some technical fruitcake puts a value of $78T on Bitcoin? Get real.
Well, I am here to tell you that is real. Certainly, I have no way of knowing exactly what BTC will be worth. However, I do know the scenarios that @haejin paints across the board with his charts are accurate. When you understand two important variables, it is easy to see why bullishness in the blockchain world is the only direction to look.
The first factor when looking at this market is short-term, a period of about 24 months. Here we see what I termed in one of my post the "big elephant": Wall Street. Over the next couple years, you will see the market cap on cryptos go from $250B to $2.5T at a minimum. Personally, I see $1.5T by the end of 2018. The bottom line is there is a lot of money about to enter this market and it will "lift all boats". I believe BTC will get the lion's share of that money yet alt-coins will share in the wealth. So far in 2017 we saw the establishment of over 125 hedge funds designed specifically to invest in cryptocurrencies. This is a drop in the bucket. I feel you can expect triple that number to pop up next year.
Factor number 2 is a bit longer term, let's say a period of 8-10 years. In that time, you will see the world GDP grow to $100T. While it is hard to predict exactly where it will be, it is fair to say that AI, automation, and other technological innovations should increase the growth rate a great deal over the next decade.
The most important thing to understand is that, whatever the GDP number is, almost all of it will be on blockchain. In a decade. most business will be taking place on this medium. Please note that GDP (as outdated a number as it is) entails the amount of commerce done, not worth. Hence, for simplicity it can be thought of as the world's revenue. Worth or valuation is an entirely different exercise.
So if blockchain is doing about $100T a year in business, what is it worth? Coming up with a figure is more art than science and really little more than a guessing game. That said, using a factor of 5 (which is about 1/3 the commonly used P/E ratio of 15 for the stock market), we come up with the total of $500T in value for all blockchains.
Does this seem outlandish to you? Consider the fact that the derivatives market is guesstimated to be $1.2-$1.5 quadrillion. In essence, we are talking about the network which has all the world's commerce being worth less than half of the "paper" bets Wall Street makes.
When you think about it in those terms, it isnt too outlandish. The numbers get huge very quickly. However, you can console yourself in the fact that the Internet was a multi-trillion innovation and blockchain is the Interent on steroids.
I am sure @haejin will be happy to hear there is a chance he is still sane.
If you found this article helpful and informative, please upvote and resteem.
Pictures by google images
Its crazy to think 1 trillion market cap but when you start to compare it to things you realize who much currency is currently floating around. Heck a guy that own a majority of Amazon stocks just showed up of having a value of 100 billion dollars thats roughly 70% of the value of bitcoin and that's just one dude! It is very very possible for us to it some massive numbers in the next year or two.
Yeah...to show your point, $5T worth of currency is traded DAILY on the forex markets....
That is more than 7 times the value of Apple...it is done daily.
I think a 10% of world broad money supply for crypto as a whole would be a reasonable long term target.
That would basically put crypto at about half the total Euro broad money supply.
I would then assign Bitcoin maybe 2.5% of that total crypto amount, putting BTC total market cap at about 125 billion. Oh, but we're already there with Bitcoin! That's one of the fundamental reasons why I say it's overbought. Syscoin, on the other hand, would need to grow by 718 times to reach its 125 billion "market share", STEEM by 455 times, BitShares by 345 times, Cardano by 125 times, for example. I estimate 50 viable survivors 3-5 years out, with most dominating their own market niches and carrying a fairly relative value - if they're all viable, then their value should be very similar.
Look at how XRP, ETH, DASH, LTC, etc. are doing; they're much closer to their eventual "pieces of the 5 trillion crypto cake". Ethereum is already a third of the way there!
We might be on the verge of crypto's first "rolling correction" where the high flyers correct and the oversold move higher, narrowing the spread between the two.
That's how I treat the big numbers - 5 trillion is a lot - and I don't think BTC will have more than a 2.5% market share in 3-5 years. It's already down to 55%, and that's after a major rally to new highs that pulled it off its all time lows below 38% just a few short months ago.
I think we're already pushing the envelope on individual cryptos like BTC and ETC when put into the macro context. Bitcoin isn't worth accounting for more than 1% of total developed world broad money supply. The whole of crypto might justifiable gain a 5-10% piece of world broad money. Right, maybe I'm wrong, but I think the idea of diversification is just to ingrained and widespread for us to expect more.
Lucky heajin. Pronounced "probably sane" by the taskmaster4450.
I guess, on balance, that he should be happy about that. The pronouncement could have been much worse. LOL
Thanks for the pointer to haejin
thank's @taskmaster4450
Not until USD crash and BTC chipped credit cards.
@driva has voted on behalf of @minnowpond.
If you would like to recieve upvotes from minnowponds team on all your posts, simply FOLLOW @minnowpond.
Mafia and the black market money is being circulated in these coins. So I don't expect these coins to go 10K or above even if they go above that then surely it's not clean money. So people who are saving their cryptocoins should sell the stock once it crosses 5K and above. This way if this crypto market falls in future due to crypto affecting local economy, there won't be much of an issues.
Along with the high chance USD value will go down, it might hold some water. I wonder if the inflated value viz a viz Quantitative Easing, will move into crypto. Then it will be a transfer of wealth to original crypto holders. Make sense?
While some of these numbers seem outlandish and perhaps will never come to fruition we have to remember that crypto is hundreds of companies and BTC is not really a company, its a form of wealth, so seeing some of the high price predictions isn't all that surprising, I think its only a matter of time before BTC hits 100K.
I've been following Haejin Lee for several months now and I find myself impatiently waiting for his next post. I, too, like what he says.
When bitcoin is thaaaaaaaat high, one transaction fee will buy a fleet of cruise ships haha...
Speaking of boats, I missed that one (pretty much) and I'm more excitable about EOS and BitShares... But I still want to hold my last sliver of BTC XD