Can Bitcoin Reach $100,000? | The motley fool

The Bitcoin (BTC 1.58%) cryptocurrency reached an all-time high of around $68,800 in November 2021. Since then, a market-wide backlash from high-risk investment ideas has driven the digital currency back to approx. $20,300 per coin – a 70% price drop in nine months. Investors are worried about inflation, geopolitical tensions and the continued fallout from the coronavirus pandemic.

Some cryptocurrency bears believe this could be the beginning of the end for digital currencies. However, diamond-handed Bitcoin investors continue to HODL their cryptocurrencies, anticipating another upswing in this volatile market.

There are differences of opinion, and only time will tell exactly how Bitcoin’s chart will shape up in the long run. Crypto investors are scratching their heads wondering if Bitcoin will ever be worth $100,000 per coin.

I think the answer to that question is a resounding yes. Bitcoin is almost guaranteed to reach the $100,000 price point. But it can take a couple of years to get there, and you should be prepared for some stormy weather on that trip.

Why is Bitcoin valuable at all?

Bitcoin’s value is based on its limited supply. There will only ever be 21 million Bitcoins, and 19.2 million of these digital coins have already been created. The US money supply doubled between 2013 and 2022. Bitcoin’s supply will never grow more than 9.8% from current levels.

This quality makes Bitcoin similar to gold, which cannot be made in a lab and has limited supplies available even if we eventually dig up every last ounce of it. Limited supply plus increasing demand equals higher prices over time.

Many investors and developers see Bitcoin as a direct replacement for gold in the long run. If it works, it’s a huge market opportunity. All the gold ever mined is worth at least $9 trillion today, according to estimates by online coin dealer Golden Eagle Coin. If you assume that physical gold holds three-quarters of the global store of value market it owns today, Bitcoin could be worth as much as $2.25 trillion when that balance is reached.

That’s up from $386 billion today, allowing for more than a fivefold increase in Bitcoin prices — landing just north of the $100,000 mark eventually. Of course, stingier or more generous estimates will move that target price back and forth, but that’s the ballpark we’re talking about.

And I’m not sure the gold replacement plan even accounts for the direct utility Bitcoin offers in frictionless digital payments. When was the last time you paid for your groceries with a gold coin? Sure, you probably don’t use Bitcoin that way either, but Amazon‘s Whole Foods Market is actually accepting cryptocurrency payments today. A few years down the line, crypto-based payments could become as popular as credit cards and Zelle payments are today.

Where is Bitcoin going?

So the $100,000 price target actually looks like low-hanging fruit for Bitcoin. I guess cryptocurrencies are here to stay and Grandfather Bitcoin will remain the biggest and most reliable cash replacement option on the market for many years to come.

At the same time, I know that it is a bumpy road ahead, and many things can still go wrong. Proper regulations and tax systems are still under development in most countries, including America. As lawmakers finalize their long-term rulebooks, it will still take time to get consumers and businesses to embrace digital currencies. And of course, I cannot guarantee with absolute certainty that Bitcoin will not be replaced by another cryptocurrency with similar goals and superior technology at some point.

So Bitcoin seems very likely to rise to the high price target of $100,000, but it is a risky ride with many potholes. Don’t expect a 400% return by the end of this year, or in the next couple of years. As the crypto market matures, the wild and unpredictable price swings we are becoming so accustomed to will soften. Bitcoin has a lot of untapped growth left to explore, as long as you have plenty of time and unwavering patience. Otherwise, you may find this cryptocurrency (and any cryptocurrency on the market today) too frustrating in this market.