Markets will do what markets want.
We are in a bull market. It is evident by the fact we are seeing all kinds of outrageous projections for Bitcoin. Of course, these might not be outrageous if the market reaches those levels.
The question many are wondering is how high can Bitcoin go?
Rarely do I debate price projections or forecasts. I watched markets long enough to know they do some strange things. For example, when some claim oil could go to $170, I know the global economy cannot handle it. Does that mean it will not happen?
I am not going to say that.
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How High Can Bitcoin Go?
We will start this analysis by being blunt: I do not buy much (if any of the narrative) about BTC presented by the maxis.
Bitcoin is not going to replace the US Dollar. This cannot serve as a medium of exchange. To start, the volatility is too great. At the same time, we are dealing with fixed money which always pools. This is something we are already seeing since the approval of the Bitcoin Spot ETFs.
There is also the problem of the network. Bitcoin is not very efficient, as evidenced by the fact that transactions are being pushed to the second layer.
Does this mean Bitcoin has no value? That is up to debate. It is why people like Jamie Dimon have a certain point when claiming there isn't much value to it. While I believe there is some value to a network that is not controlled by Wall Street (as long as it stays that way) and provides consensus without the banks.
In fact, this is what I think is the major contribution that Satoshi provided the world. He solved the consensus problem without a centralized entity.
Is that, alone, worth an extremely high valuation? Here is where we go back to markets: only the participants will decide.
The Case For Higher Numbers
Perhaps the greatest case I can make for higher values is the fact Bitcoin cannot be forked.
Naturally, it is possible from a technical angle, as the network was forked many times. We have Litecoin, BCash, BitcoinSV, and a host of others.
Do you know what they all have in common? They are not Bitcoin.
Unlike other networks, which can be forked, make technical changes, and attract applications, Bitcoin has none of this. It is either Bitcoin or it is not. Any fork is a cheap replica of the original, something that will never change.
All of this means that we then can talk about the other aspect to this: trust.
Our entire financial and monetary system is built upon this. If people believe in something, it is the case. This goes counter to what many espouse. There are many, including a lot on Wall Street types, who try to apply fundamental characteristics to what we utilize.
Ultimately, it comes down to trust. The entire financial system is constructed in a way to try to instill that. With Bitcoin, the approach was to implement trust in a trustless manner. The idea is to make the blockchain the counterparty risk.
Again, I think this has some value.
However, the numbers bantered about are only going to arrive because the markets pushes it there. Will it be based upon some fundamental premise? Not likely.
Bitcoin price moves upward will arrive, if they do, because participants believe that holding Bitcoin is a good move. Right now, for the most part, it is retail. There could come a time when institutions, central banks, and sovereign wealth funds hold Bitcoin.
If this happens, we could see these numbers pan out.
Is $1M BTC possible? I am not going to argue against that. $2M? Perhaps.
In Conclusion
Hopefully this clears a lot of the noise that is out there.
People are trying to apply fundamentals to Bitcoin like it is a company. When we look at things from a network perspective, the story is against higher levels. None of this matters.
Wall Street can build an assortment of products utilizing Bitcoin because people believe in it. With that trust, we start to see the self fulfilling prophecy.
Thus, the next time you see a $1 million Bitcoin and think it absurd, just know that it might not be a good idea to bet against it.