As I have mentioned several times in recent months, my targets on bitcoin are conservative and will be raised every few months. I maintain my $50,000 target for 2027 which is also conservative.
The cryptocurrency market cap crossed 200 billion dollars overnight Bitcoin is now 61% of that, up from 46% six weeks ago as money flowed out of altcoins and chased bitcoin before the fork coming in two weeks.
Bitcoin has jumped split-adjusted by 240% since my July 5 recommendation including the August and October splits. The recent explosion in the price is coming in advance of the November 16 split; a listing on the Chicago Mercantile Exchange; and comments from IMF head Christine Lagarde that she believes cryptocurrency will replace the traditional banking system.
Every day more headlines are hitting the newswires on crypto. More countries are embracing it and the few obstacles that were standing in the way are falling down like dominoes.
There is currently 200 trillion dollars in the world tied up in cash, stocks, bonds and gold and I am not excited about putting my money into any of those — If 1% of that 200 trillion dollars finds Its way into crypto in the next 10 years you will be looking at a 2 trillion dollar valuation — 10 times what it is today.
Yesterday, I had to go meet a client of mine (Morgan Stanley) on Park Avenue in New York. This is a client of mine who pays for my stock recommendations. I thought I was just going to meet with him. To my surprise there were five other people waiting for me in his office and we ended up speaking for two hours — all they wanted to speak about was Bitcoin. I found that quite amusing and an endorsement of sorts. Earlier in the day I met another client on Park Avenue (Oppenheimer) that went the same way.
My aggressive crypto market cap target is actually 2% within 5 years that would put the industry at $4 trillion dollars and bitcoin would be at 2 trillion (if it holds a 50% market share). The price would then be $120,000 and only 25% of where the gold market is today. Many people believe that Bitcoin will eventually catch up to gold ($8 trillion) and I would not argue with that. $8 trillion would get bitcoin to $500,000.
There are some concerns and obstacles that we still need to be worried about and I have detailed those obstacles and concerns in my 87-page report from July and the notes that have that I have written since.
There are individuals like Jamie Dimon, Prince Alwaleed and Warren Buffett who say that Bitcoin is a scam and a bubble. What would we expect them to say? All three are heavily invested in the publicly traded US banks that is threatened by cryptocurrency. Bitcoin is not a scam and it is not in a bubble. You are more likely to find scams and bubble in the US stock market.
Crypto is a value play and I have never seen a value like this in my 20 years in the business. It remains undervalued by more than 75% even though bitcoin has jumped by 1200% already in the last year and it has doubled since Jamie Dimon referred to bitcoin as a scam just six weeks ago.
Asking me to replace crypto with the traditional banking system right now would be the equivalent of telling me to replace my computer with a typewriter. I have never seen a supply-demand imbalance like this in my life. You are going to have a situation in a few years where there are 200 million people in the world trying to get their hands on a few million bitcoin that are available for sale. The circulation will be capped at 21 million and we will hit that in 2040. Currently we are at 16 million (floating) but most of those bitcoin are locked up by people like myself who will not sell them to you at any price.
Bitcoin will be volatile as we have seen the price double in just the last six weeks from 3700 to 7400. There will probably be a pullback between now and the time we hit my target for next year. My guess is that there will be a pullback – sell on the news and rotation back into altcoins — after the spin-off on the 16th of November. You can see details on that below.
Many of you have missed the move from $74 to $7,400 but you have not missed the move from $7,400 to $74,000. I do expect we will hit that mark in the next 5 to 10 years. We are in the early stages here with less than 0.5% of the World population in crypto. That should hit 2.5%-5.0% in the next 5-10 years.
Bitcoin market cap is now $120,000,000,000 that is 25% above where Goldman Sachs is at. The total crypto market cap of 200 billion dollars is now more than two times what Goldman Sachs market cap is. There are more than 1,000 cryptocurrencies — I do not pay attention to the smaller names. 90% of the 200 billion dollars is tied to the top 12 names. You need a $1 billion valuation to get into the top 12 and you need a $470 million valuation to crack the top 20.
As I have been reiterating for several months now — you have to buy and hold on to this and add to your position on corrections and market panics that we get from time-to-time. You also have to understand that there will be people trying to corner this market and shake people out of their positions. It will be a rocky ride but you have to play this the same way you played Amazon in the stock market. AMZN went from $50 to $1,100 … it did not go up in a straight line. Anyone that bought that name and held on to it for the last 15 years and added on dips is retired today and that is what I expect will be the case with bitcoin.