Macroeconomics guru Raoul Pal reveals why he thinks Bitcoin will climb to $ 1 million by 2026.
In a new interview, Pal says the laws of supply and demand are working in Bitcoin’s favor, creating a feedback loop that attracts more institutional investors.
“Fundamentally, the supply is limited, limited by an algorithm. So it can never be changed, so you will always know what the offer is. So, then the question is, what is the demand?
What is interesting about this is that the more the price increases, the more the market capitalization increases, the more financial institutions need it. Its value for money is also attracting more interest. “
Pal says his price prediction for Bitcoin is based on the stock-flow model among other valuation modeling methods, all of which point to a $ 1 million Bitcoin by 2025-2026.
“I got there in different ways. First, there’s someone you can find on Twitter called Plan B … and he analyzes the stock-flow model, which means you look at the amount of supply over time of an asset and how that affects the price. It is essentially the scarcity.
It’s the same way gold works, diamonds work, things like this work… rare assets. And it becomes relatively predictable. This predictability would suggest that we could get around $ 1 million by 2025-2026.
Then we can use the logarithmic scale and look at the price of Bitcoin on the logarithmic scale, it kind of gives you the same price predictions. Then the other way to look at it is to look at the total amounts of aboveground gold supplies and its price, then do the same for Bitcoin and you get something similar. So there are a number of things that suggest this. But at a more reasonable level, a million dollars is multiplied by 50 from here. Bitcoin is currently worth $ 300 billion in market cap… that’s roughly the market capitalization of gold… It’s not unreasonable.
Pal says efforts to launch a Bitcoin exchange-traded fund will be critical to Bitcoin’s growth, calling it the most attractive way for institutions to gain exposure to the main cryptocurrency.
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Image en vedette: Shutterstock / pixelparticle / MicroOne