Is Bitcoin's Price Going To Reach $55k? It Is Quite Possible!

1 min reading

As a popular quantitative analyst nicknamed PlanB believes, the Bitcoin exchange rate is likely to increase significantly over the next seven months. What is his speculation based on?


The impact of shortage on BTC price

The pricing model presented by PlanB is based on a shortage of a leading cryptocurrency. His view is that Bitcoin will reach a market capitalization of around $1 billion, that is right after Halving, which should take place in May 2020. This, in turn, will make every BTC coin reach the value of USD 55,000.

As it is commonly known, there are 21 million Bitcoin coins that are possible to be dug. Currently 18 million have already been extracted, so only 3 million BTC coins remain undug. It should also be taken into account that around 14-19% of all BTC have been lost or stolen. If we assume, then, that these 15% of the coins are gone, only 18 million will actually be in circulation. By dividing one billion by this number, we get a price of 55 555 dollars. This amount, in turn, is similar to the forecast presented by PlanB.


Bitcoin as a gold-like asset

If the shortage theory proves to be true, it is assumed that the BTC price may increase sevenfold. Where did this billion of market capitalization come from in the speculations of this particular analyst, though? He stated that Bitcoin is in some respects similar to gold and silver, because, as he called it "this is the first rare digital item" What is interesting is the fact that his assumptions show that some people will simply transfer their funds from this type of assets to BTC. The demand for Bitcoin can also be guaranteed by financial crises in different countries. Citizens of such countries, while being under pressure from predatory governments, are more likely to choose BTC.

These assumptions are not new, of course, as it is not the first time Bitcoin is being compared to gold. At the beginning of this year, Mark Yusko from Morgan Creek Digital gave a similar opinion about this cryptocurrency. Yusko's forecast, however, predicted that market capitalization would be higher than presented by PlanB. The latest situation on the Bitcoin chart, though, does not indicate that such huge changes should take place in a few months.