Do you believe John McAfee is right about Bitcoin hitting $500,000 in 3 years?

Question originally asked on Musing.io - Click here to see other answers

How can someone know (or believe) if McAfee is right about Bitcoin hitting $500,000 in three years? He made his point, but we should wait for three years to see whether he was right or not. We cannot even predict the price of a stock or of a fiat currency pair, let alone the Bitcoin’s price, which is the most volatile asset as of today.

Currently, Bitcoin price is driven by emotions - everyone wants to enter the game to make some profit. Few people really care about the functionality and potential of Bitcoin as a decentralized system and as an alternative currency. Most of the investors only care about buying cheap and waiting for the price to go continually higher. So, when a market is driven by emotions, everything can happen - such a market cannot be accurately predicted since our emotional nature is unstable. It is like watching a kid playing - you never know what he would do next. In a few months another cryptocurrency star may appear, which may replace Bitcoin - people will quickly switch their attention to that one. The sentiment is the key here.

In theory though, it is possible for Bitcoin to touch $500,000, even in three years.

In 2020, Bitcoin supply should be 18 million.

A price of $500,000 per Bitcoin would mean a total market cap of $9 trillion.

For comparison, the USD money supply (M2, which includes more than just banknotes and coins - it is also about money deposits and less liquid forms of money) is $14 trillion.

Considering the increasing inflation, in 2020, the total USD supply might be around $16 trillion - the point is that Bitcoin’s market cap would be more than half of USD total supply.

So, can Bitcoin do that? Well, it can. This is because Bitcoin is a global cryptocurrency rather than a US one, so we should measure the total value of all the currencies out there. In 2016, this figure (broad money) was $80 trillion according to CIA Factbook.

In 2020, this figure should be around $90 trillion given the inflation. So, Bitcoin would have a share of 10% of the whole Forex market.

This is realistic, at least in theory.

If central banks would buy Bitcoin for their reserves - Central Banks Will Add Cryptocurrencies to Reserves, Says Blockchain.info CEO - Cryptovest - and if it goes mainstream, everything is possible.

And remember - Bitcoin has much room for growth. Today, there are less than half million people holding at least one Bitcoin.

Anatol Antonovici's answer to How many people have at least one bitcoin?

There are only 1500 wallets holding at least 1000 Bitcoin ($14 million).

Such a price is not out of this world, but Bitcoin can lose competition against a more advanced blockchain.

No one knows for sure what will happen. Anyway, it doesn’t mean predictions are not helpful.