Bitcoin. What is it? How much is one worth? And how much is it going to be worth in a few years and long term?
You have questions. I have ideas.
Let’s break it down one by one. Because when we’re talking cryptocurrencies (already confused by that word?) like Bitcoin it can be easy to get lost in terminology and explanations.
For the sake of brevity, here’s my definition and my dumbed down explanation in parenthesis:
A Bitcoin is a digital currency (internet money) that is decentralized (completely independent of a central bank or country) and uses blockchain (encryption, or a digitally secure method) to prove transactions have been made and to keep an accurate ongoing record of activity.
Still confused? That’s alright.
People were confused about cars and the internet when they first heard about it. But they learned and those two inventions turned out to win the day over horses and newspapers.
Basically a Bitcoin is internet money for the people, and belongs to no bank or country. If you want another explanation, this piece from Coindesk should help.
The current market value of 1 Bitcoin at this exact time of writing this blog post is $3,630—well now it’s over $5,000 in just a week or two later when I first drafted this article. Excuse my Captain Obvious (just being mindful of the rookie investors here): that’s the rate you have to pay if you’re going to buy one today and the return you’d get if you’re selling one right now.
For a little personal back story, the first date I bought Bitcoin was in May 2016. That’s around 16 months before posting today’s article. That’s 16 months to grow in value—and let me tell you, it has been the best investment of my entire life to date. (Tesla is up there, but this takes the cake by far.)
I’ll do another video about my Bitcoin story to fill you guys in.
But for now it’s all about the crazy high potential of Bitcoin and why I see a rich future in this cryptocurrency years and decades from now.
What Will Bitcoin Be Worth In A Few Years?
Before anyone gets too carried away in what I’m about to write, let me preface this with a blunt statement: No one knows (including me) the future price of Bitcoin.
(And don’t trust anyone that claims they know. They’re either liars, or they’re liars and thieves trying to steal your money for their personal gain.)
However, I wouldn’t be surprised if in the future 1 Bitcoin is worth $100,000. That’d mean it rockets in price to be worth 20 times more than it’s worth today!
Though it’s not just me who sees insane potential in Bitcoin.
Check out what John McAfee—remember the guy famous for inventing the McAfee anti-virus software? this is the same man—tweeted:
While no one may be as bullish on Bitcoin as McAfee, other recent estimates from super smart people in finance see high growth for this revolutionary cryptocurrency coin:
- Michael Novogratz won’t be surprised if 1 Bitcoin is worth $10,000 in 6 to 10 months
- Ronnie Moas predicts Bitcoin will reach $15,000 to $20,000 value around 2020
- Tom Lee says it’s possible we’ll see 1 Bitcoin at $55,000 in five years
Here’s why I hold this lofty marker for Bitcoin and why I think it (along with other cryptocurrencies) can change the world as we know it.
(As the note at the bottom of this blog posts suggests, this is just my opinion and not investment advice.)
Strong Advantages Bitcoin Has Going For It
I’m not just making a wild prediction when I say Bitcoin has the potential to be worth $100,000 someday. I don’t say stuff like that on pure whims.
My hopefulness is backed by some hard facts that Bitcoin has going for it:
- Bitcoin is the first and top brand of all cryptos. Being the bellwether brand in this space gives Bitcoin more staying power and a better likelihood of reaching mainstream adoption than anything else. The first mover always has rare advantages that other coins have a difficult time catching up to. (See Facebook as an example of early acceptance and then dominating at the top spot.)
- It costs money for miners to mine Bitcoin. Since it costs human resources, machine power, and money to mine Bitcoin (thousands of dollars or more), there’s real value in the coins unlike printed money where the federal banks can print as much as they want and create inflation.
- Bitcoin and the blockchain can be a transcendent technology. Inventions like electricity and the internet changed the world forever and the early adopters in the internet are still reaping the absurd financial benefits today. Since Bitcoin eliminates the middle man (banks) in financial transactions to save people fees and time to send or receive money, this technology has the potential to completely upend the banking system, world financial system, and how society is run as we know it. If or when it does that, a serious price increase will follow.
- Anyone can buy it, not just rich people. Investing in startups, real estate, and private companies is only allowed if you’re already wealthy, but you don’t need a private invitation to invest in this cryptocurrency and the others. The fact that anyone can buy Bitcoin gives it a tremendous advantage over other investment assets. By allowing the masses to get in this game or put their money into Bitcoin to protect themselves against government inflation, it makes Bitcoin more likely to be a fixture in the future.
- The rising usage of Bitcoin means rising price and long-term value. As countries like India “legalize” Bitcoin and places like Japan open up Bitcoin ATMs the exchanging of Bitcoins is going to rise, which raises its monetary value. Plus more usage leads to more word of mouth marketing from businesses to non-profits to neighbors.
- Talent is flocking to work on blockchain technology. Working in Silicon Valley used to be the hottest trend for the world’s brightest minds, but there’s been a flocking of brilliant people who are spending their every working hour on Bitcoin, the blockchain, and related opportunities.
- There is a limited supply of 21 million Bitcoins. After all 21 million Bitcoin are mined, no more Bitcoins can be mined since that’s the limit. Then the supply plummets and the demand skyrockets. The problem with cash is the Federal Reserve and governments can always print more so supply is always there. The lack of unlimited Bitcoin supply will drastically raise its value over time.
Keep in mind two more things.
First, those details above are just some of Bitcoin’s advantages. I could have gone on longer but those are what I feel are the main benefits that give it insane potential to grow in price to multiples of the current value.
Second, none of those advantages mean Bitcoin is a guaranteed winner and it’s by no means a risk-free investment. Countries like China and Russia have been clamping down on cryptocurrencies which poses threat (or maybe more potential for success) to this space.
In complete transparency, although I’d say I’m well read and “in the know” about Bitcoin, by no means am I an expert or the smartest guy out there on the subject.
What you read are just my quick thoughts off the top of my head that I intentionally tried to keep simple to avoid confusion.
What do you think about Bitcoin, its future worth in a few years, and the cryptocurrency space in general?
And while I’ve personally had unbelievable financial success investing in Bitcoin and I am still long on the technology going forward, it could drop by 50% or 100% of its value and go to $0 at any moment.
Tremendous risk surrounds this cryptocurrency space as of now.
So don’t invest money you can’t afford to lose. Don’t risk losing your car, house, or the stability of your family because you did something stupid and got burned.
Be smart with your money. Start small if you’re going to invest in anything, including Bitcoin. And realize that you can lose the shirt off your back if you make bad investing decisions.
Also, read the note below to be clear about the intention of this blog post. Good luck!
The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.