The Bitcoin price has jumped by 84% since my recommendation on the 5th of July I am raising my price target for Bitcoin from $5,000 to $7,500. I am leaving my 2027 price target of $50,000 unchanged for the time being — that 2027 target all good most likely will be raised in the next 12-24 months and/or moved back to 2024-2026.
In order to go from the current quote of $4,177 to $50,000 within 10 years you would need 28% annual compounded growth. I have gotten three times that in just the last six weeks with the 84% gain. Any way that I look at these numbers, my forecasts are looking conservative. It looks to me as though we are at the same point in the adoption curve as we were in 1995 when we went from one million internet users to ten million. The following year the Netscape browser came online and we went from 10 million users to hundreds of millions of users overnight.
I expect that within a couple of years we will have between 50 and 100 million cryptocurrency users — up from approximately ~10 million today. We only have 0.15% market penetration right now — if that goes to 2% or 3% we will get to the $50,000 price target that I set at the beginning of July.
Cryptocurrency is becoming more widely accepted by the day and the exchanges are having trouble handling all of the new accounts that are being registered (as is evidenced by slow customer support). The governments of India, Japan and Switzerland are on board, as are FedEx, Goldman Sachs, IBM, Richard Branson, John McAfee, Max Keiser, Mark Zuckerberg, Bill Gates and many others.
The consensus among the sharpest knives on the block(chain) is that we are going much higher – it is merely a question of how long it takes to get there and how high we go. My target assumes crypto will get to $2 bln by 2027 (versus gold which is now at $8 trillion.
As I mentioned before and highlighted in my 122-page report on cryptocurrency from last month — which is available at my website — there is currently 200 trillion dollars parked in cash, stocks, bonds and gold worldwide. That is $25,000 for every man, woman and child. Obviously, that is not evenly distributed and half of that 200 trillion dollars is in the pockets of the one top 1%.
I am not excited about putting my money into any of those four buckets (cash, stocks, bonds or gold). In my opinion at least 1% of that money is going to find its way into cryptocurrency in the next 10 years and that would bring this industry from a 140 billion dollar market valuation to two trillion dollars — that would be a 1330% return from where we are today.
In my earlier forecast I explained that in order to go from where we are today ($4,177) to $50,000 by 2027 (on the price of Bitcoin) would require annual moves of 28%. If we get annual compounded moves of 38% — the price of Bitcoin goes to $100,000 by 2027. That is actually where I think we are headed. If you look at the penetration right now of 0.15%, this is just starting to gain traction. I think you are going to see at least 2%-3% penetration in the next few years and you will have tens of millions of people fighting over a limited and capped supply of 21 million Bitcoin.
Many of those who hold Bitcoin, myself included, will not be willing to sell — and that will be what forces the price higher.
It should not surprise anyone that people in countries outside the US — where there are unstable currencies — are going to be trying very hard to get a piece of this. I think crypto is going to become part of asset allocation models in the near future and of strategic reserves. There will be cryptocurrency ETFs and hedge funds will have exposure here.
In just the last few weeks, the market cap for cryptocurrency jumped by 50% from 92 billion to 138 billion. The market cap of Bitcoin right now is 69 billion — so that is a 50% market share. There are more than 800 cryptocurrency names below Bitcoin at coinmarketcap.com and their combined market share is equal to that of Bitcoin. There are now ten names with market cap of at least $1.3 billion and in order to crack the top 20 you need a $418 million dollar market cap — that cut off point has jumped by more than 40% from less than $300 mln a few weeks ago.
In just the last few weeks there have been a few people that replied to emails of mine comparing cryptocurrency to tulips — although that may be a good comparison when looking at the bottom 750 names in this 800-name pack, it does not apply to many of the names in the top 50.
For those who ask me what is backing Bitcoin — my reply is what on Earth is backing the US dollar? The US dollar has lost 75% of its value since I was born in 1967 and has lost more than 75% of its value in many other countries (outside the US). Over the course of history most currencies have gone to zero. I think we may finally have an accepted currency that will go in the opposite direction and appreciate in value over time. We are still in the first quarter of a four-quarter game (that may indeed go into overtime).
Most of the growing pains in this industry are behind us and fears regarding security, which are justified, are declining by the day. In my 122-page report, I elaborate on the issue of security, an issue that is absolutely critical for those who open up accounts for themselves. You need at least two-factor authentication and preferably a third layer of protection. Adding that third layer is quite confusing for most people and will require the assistance of a professional to walk you through the process.
I do not agree with placing all of your money in Bitcoin and/or Ethereum. I think you should be diversified and explain via which names to do so in my report and daily notes. Just as Facebook came along and wiped My Space off the map 10 years ago, someone in the top 25 or top 50 right now could end up knocking Bitcoin off of its top position in the next few years.
Some will choose to bet all of their money on Bitcoin while others may decide to bet on the rest of the pack and spread their money out across names # 2 through # 25 — which now have a combined market cap that is about 80% of where Bitcoin is at today. Ethereum is # 2 at $28.4 billion and Ripple is # 3 at $6.8 billion. The spin-off from Bitcoin on August 1 (Bitcoin Cash) is now at $5.0 billion. The top ten is rounded out by six names that are between $1.3 and $2.4 billion — starting with NEO and followed by Litecoin, IOTA, NEM, Dash and Ethereum Classic.
I strongly advise anyone who is investing in cryptocurrency to take a look at my 122-page report before doing so.
There is a big difference in what your expected returns will be depending on what your entry point is. For example, if you act today, you will see 28% annual compounded returns for 10 years if we hit my $50,000 target in 2027. Had you gone into this at the beginning of July, when I made my recommendation, your compounded annual returns to reach that same $50,000 price target would be 37%. If you wait until we cross $5,000 (or $6,000) before acting, your upside to $50,000 starts to move towards 20% annual compounded gains.