Why Bitcoin Will Become a $1 Trillion Market
I first heard about cryptocurrencies back in 2013, when my college roommate told me about bitcoin.
He said it was going to become the next big thing, and that it could even replace paper money eventually.
I thought he was crazy. And there was no way I was going to spend $200 on one of these “coins.”
But quickly, stories began to spread about people becoming millionaires overnight from mining cryptos.
There was even someone at my college who dropped out of school to do it full time. And he made millions over the course of my junior and senior years.
Despite all of these stories, it took a long time for me to warm up to the idea. The first crypto crash that began in December 2013 scared me away even further.
Although I’d been watching prices go up and up in 2017, it wasn’t until November that year when I finally put my own money into the market.
I was at a big tech conference gathering information about new trends and products when I heard about an organization called Iota.
Its mission was to create a system on which machines can trade money for data, cutting out any middlemen and making the transactions instant and automatic.
Being that this was central to the Internet of Things revolution, I began to do research on it. And best of all, it just so happened that it had a cryptocurrency that I could buy, also called Iota.
So I bought in and began tracking all sorts of cryptocurrencies and their various projects.
Of course, this was right in the middle of the huge bubble. But based on all the information I’ve seen, crypto has an extremely bright future.
The Answer for Runaway Inflation
To make any market legitimate and worth investing in, there has to be demand. And right now, we’re seeing demand for crypto at unprecedented levels.
Back on May 16, the amount of crypto bought hit an all-time high of $120 billion.
That’s some serious buying! And it’s about $50 billion more than was ever bought in a day back at the peak of the 2017 crypto mania.
One main factor driving this buying is the major inflation going on in dozens of countries.
Right now, there are 22 countries that have double-digit inflation rates, half of which are in Africa. So it’s no coincidence that crypto transactions in Africa went up by 130% in 2018, and are still climbing.
Even though crypto prices fell straight down throughout 2018, there were still over twice as many transactions as 2017. After all, if your currency is falling in value by over 10% per year, you’re looking for any alternative.
A couple more examples of this situation are Argentina and Venezuela.
If someone had bought bitcoin at the very peak of the 2017 bubble, which was one of the biggest bubbles in history, you’d still have more value than if you’d left pesos in a bank in Argentina.
And in Venezuela, cryptos have become a tool of survival.
With hyperinflation expected to hit 8,000,000% this year, it’s pointless to hold onto the local currency. And since people aren’t allowed to exchange it for foreign currency, they’re turning to cryptos.
So far in 2019, bitcoin buying in Venezuela has been well over $1 million per day on average. And that doesn’t include family members and friends buying bitcoin from other places to send to people for help.
This is essentially what bitcoin was made for: a way to store value without interference from governments and banks.
Bitcoin Is a Lot Like Gold
So, with all this widespread adoption, cryptocurrencies are emerging as a legitimate new asset class. Even as bitcoin fell 84% from its high, demand stayed strong, and now we’re seeing more buying than ever.
The same goes for ethereum, the second-largest cryptocurrency, which fell over 94% from its peak.
Despite all of the negativity surrounding these investments, the reality is that they’re not going away. And although buying into crypto can seem scary, it’s important to think about just how high the potential value is.
The way that I do this is by comparing the crypto market to the gold market.
That’s because crypto is seeing sustained demand in areas where people want to store their wealth in something other than an unstable currency.
That sounds a lot like gold! And right now, the gold market is valued at about $8 trillion. Meanwhile, the value of all the bitcoin in the world is just $156 billion, less than 2% of gold.
Looking at the trend of money moving into cryptos, particularly bitcoin, it’s not unreasonable to think that it could take a big chunk out of the global market value of gold.
If this demand continues, bitcoin will become a $1 trillion market.
At that point, each coin would be worth a little over $56,000, compared to the $9,000 we’re seeing right now.
So, as far as long-term investments go, there’s nothing else like bitcoin.
Editor, Rapid Profit Trader