Is Bitcoin Going to $100,000 – or $0?

Bitcoin (BTC -2.31%), the only cryptocurrency to ever achieve a market capitalization of more than $1 trillion, has established itself as the world’s most widely used and accepted digital asset. Despite Bitcoin’s astonishing performance and proven history of price appreciation, critics believe it could one day soon be headed for worthlessness.

Their primary reasons usually point to its perceived lack of intrinsic value, absence of utility, and its resemblance to a decentralized Ponzi scheme. This combination has led some to assume that the chance of Bitcoin heading towards $0 is much more likely than it ever reaching $100,000.

In reality, when evaluating historical and current trends surrounding the use of Bitcoin and what it offers users, it becomes clear that the probability of Bitcoin reaching $100,000 is much higher than it ever falling to zero.

The case for 100,000 dollars

One reason why Bitcoin is more likely to reach $100,000 than zero is its increasing adoption, mainstream acceptance and growth of the network. Over the past few years, more and more individuals and institutions have started investing in Bitcoin, recognizing its potential as a store of value and medium of exchange.

Large companies such as Tesla and Block have made significant investments in Bitcoin, and more traditional financial institutions such as Black stone and Fidelity has started offering Bitcoin-related services to its customers. This growing acceptance and use of Bitcoin could increase demand and increase its value over time.

In addition, when looking at the trajectory of crucial calculations related to Bitcoin’s network, it becomes clear that the cryptocurrency is booming, even though its price remains more than 60% off its all-time high. Stats such as the number of addresses with a positive balance, average transaction size, and mining difficulty (a measure of the network’s security and decentralizations) are all at or near all-time highs.

The primary factor driving this growth and the continued use of Bitcoin is related to its scarcity. Despite claims by critics who say Bitcoin lacks intrinsic value, Bitcoin derives its value from the fact that unlike traditional fiat currencies that can be printed by central banks at will, inevitably eroding the purchasing power of those who hold them.

Bitcoin holders increase their purchasing power over time, unlike government-issued currencies. This is because Bitcoin is limited to a total supply of 21 million coins, and the rate at which new coins are created halves every four years.

Should more people come to this realization, Bitcoin could become a true beneficiary, thanks to the simple dynamics of supply and demand. As more individuals and institutions seek to invest in Bitcoin, it will become less available, potentially increasing its value. If governments around the world continue to print more fiat currencies in response to financial crises as they have in the 21st century, then it is not difficult to imagine that the demand for a stable asset like Bitcoin could exceed the limited supply.

Finally, technological advances and improvements to the Bitcoin network can also contribute to a further increase in value. For example, the implementation of the Lightning Network, a Layer 2 payment protocol that enables faster and cheaper Bitcoin transactions, could make the cryptocurrency more accessible and user-friendly, potentially increasing demand as it proves more useful for everyday purchases.

Patience is a virtue

Although the future price of Bitcoin is impossible to predict with any accuracy, the combination of these factors makes it much more likely that Bitcoin will continue to rise in value over time, rather than reaching zero. Considering this possible future makes investing at today’s prices that much more alluring. Bitcoin is trading for around $28,000 at the time of writing, so if it reached $100,000 it would represent a 260% increase.

There’s no telling when this might happen, and anyone who claims to know is just guessing. But as Bitcoin proves its resilience and attractiveness as a store of value, its long-term potential upside looks very attractive.