Crypto having its internet growth moment
The consensus about crypto’s bull case is that ideally, crypto will eventually follow the internet and become as ubquitous as the WWW.
Among others, Mark Cuban predicts cryptocurrencies to follow in the internet’s footsteps eventually. Real Vision founder and macro investor Raoul Pal now said that crypto may be in fact outpacing the growth rate of the internet. According to Pal, crypto is in year six after its first five million users and has 295 million participants – compared to 119 million the internet had at the same stage.
Furthermore, crypto is growing at 137% a year while the internet grew at 76%. Pal is adamant that crypto is undergoing the fastest adoption of technology the world has ever seen. According to Pal, who is widely seen as one of the most proficient and knowledgeable experts in the space, crypto could grow to five billion users by 2030. That would see cryptocurrencies become the dominant source of owning, transferring and recording value and contractual terms globally.
Pal also assessed the potential future market cpaitalisations of Bitcoin and Ethereum. He sees more upside potential in Ethereum, predicting that it could flip Bitcoin for market cap after all, provided it becomes the prime decentralised application ecosystem globally. Pal said that while Bitcoin is a “pristine collateral, security, and store of value,” which also makes it the most valuable network, Ethereum has “more applications.” As Ethereum attracts more users over time, surpassing Bitcoin in market cap will become inevitable.
Pal predicts massive Bitcoin price
Pal also did not shy away from attaching numbers to his analysis. He foresees a price target of $600,000 ($813,000 AUD) for Bitcoin if it “remains one standard deviation below the trend.” Two standard deviations below the trend would halve that price target. Even a less optimistic regression still yields a worst-case scenario of $200,000 ($270,000 AUD).
Why Pal may be right
Considering how far cryptocurrencies have come in only little over a decade is astounding. Even less than ten years ago, their main utility was to pay for illicit services on the internet. Yet, today, we are considering that eventually the entire global population may be using crypto in some form, either for payments or as a store of value.
Thus, Pal may be right that the best is yet to come. A 10X increase in the nominal price of BTC would indeed require almost everyone to use Bitcoin in some form. But considering the ever greater role tech plays in our daily lives, that may be less far-fetched than it seems today. After all, cashless payments were virtually non-existent a few years ago. Yet, they have pretty much eliminated the use of physical money in some corners of the world. Going from cards to crypto would be a much smaller evolution than from cash to cards.
In that case, crypto investors should sit back and HODL because the best is yet to come.