Is Bitcoin About To Go Ballistic?

As a rule, I don’t like getting into crypto price predictions: primarily because the vast majority are clickbait garbage. However, right now I think we could be witnessing a pivotal moment in the history of bitcoin and other cryptocurrencies, so I’m willing to take a punt.

Over the last few days, I’ve seen predictions for bitcoin as high as $31 million - all catalyzed by the pending approval of BlackRock’s spot BTC ETF, and Grayscale’s recent victory over the SEC regarding the reconsideration of its spot bitcoin ETF application. And, this isn’t surprising given the potential capital inflows into the crypto space when/if these ETFs go live - which could run into trillions of dollars.

Bitcoin and crypto have withstood everything thrown at them

But, in my opinion, there is something even more fundamental going on right now. Namely, the world seems to be going to Hell in a handcart, but bitcoin and crypto are still here, and despite all the naysayers over the years, the ecosystem is stronger than ever. Sure, things like NFTs have fallen by the wayside, but despite disasters like the collapse of FTX, crypto as a whole is still solid.

And, while bitcoin and crypto have proven surprisingly durable in the face of adversity, the same can’t be said for fiat currencies. The rampant inflation brought on by insane money printing - something which began in the 2008-09 Financial Crisis and went into overdrive during the 2020-22 pandemic - has exposed the fraud that is the traditional financial system. Of course, spreading global conflict hasn’t helped on the inflation front either. Even those who never questioned the integrity of the global financial and political systems before, are now nervous.

True, there were many, especially in the bitcoin space, who always insisted cryptocurrencies would emerge as a strong hedge against inflation and macro turbulence. But, until recently, the BTC price, for example, was still strongly correlated to things like tech stocks. Understandably, this threw people and caused them to see BTC as risk on, rather than risk off like gold and similar assets.

Putting things in perspective: bitcoin and crypto are still new

But, it has always seemed reasonable to me that, while some of the risk-on perception of BTC was the result of it being a new and unregulated asset, a large part was just because the kind of people and funds involved with riskier tech were naturally going to be more interested in digital assets. In a nutshell, tech geeks were always going to take the lead in bitcoin and crypto anything - not necessarily because it was riskier, but just because they were naturally drawn to it. A thematic attraction shall we say. I believe the effect of this has been massively underestimated by most analysts.

I also don’t think those who are glued to the graphs and charts are the ones to listen to. Look at enough charts for long enough, and you can always come up with patterns and predictions. But, like I said, most are fundamentally rubbish. But, because people naturally look for patterns in everything, and feel comforted by having their own opinions reinforced, the technical analysts will continue to attract more attention than they deserve. But, zoom out far enough, and it is possible to see broad trends. It's like the balloon thing - most of the space in an inflated balloon is empty. The gas molecules bounce around at random, hitting the sides, causing the balloon to have its inflated shape. You can’t predict where any single molecule, or even thousands of them, are. But, if you put enough gas into a balloon, you can pretty much guarantee it will have its inflated shape. Because, when you zoom out to hundreds of billions of gas molecules, you can reasonably accurately predict their behavior. And, this is where we’re now at with bitcoin and crypto. The scale is such that the approximate trajectory over the long-term is now predictable.

I think bitcoin and crypto, thanks in large part to the passion of developers and users, have truly established solid bridgeheads and are about to break out. They have stood firm in the face of everything the world could throw at them. Sure, some have fallen, but enough remain. They have been ridiculed and ignored. They have done battle with regulators and politicians, and are still standing. They have survived economic and other global crises. They are weathering war. And, all the time, more people have been learning about them and experimenting with them.

Just like with most new technologies, the time from invention to adoption is much longer than most realize. Buyers could already choose from several motorcar brands by the 1890's, yet it wasn’t until decades later that they began to become commonplace even in rich countries. Wabash, Indiana, had electricity in 1880, but again, it would be decades before most used electric lights even in wealthy countries. And, the first powered flight was in 1903, but it wasn’t until World War 1 that aircraft were widely used, and not until much later that commercial air travel became affordable.

Although bitcoin launched in January 2009, I suspect many people in the future will look back and assume it didn’t appear until a decade later. And, most altcoins will still probably go the same way as the plethora of early car makers - lost in the history books. But, I do believe we are now truly on the cusp of the bitcoin and crypto era. All that has happened until now has merely been the prelude.

And, as for price, well, $37 million bitcoin is unlikely, but with each day that goes by, the often-stated $1 million within five years feels more and more realistic. So, yep, I'm saying $1 million BTC within five years. Of course, this definitely isn't financial advice and full disclosure - yes, I do own some BTC.