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Million Dollar Bitcoin?

bitcoin million dollar

  • U.S. cryptocurrency exchange Kraken CEO Jesse Powell tells Bloomberg Television that Bitcoin could hit US$1 million or higher
  • Investors being taken in by such high price predictions should look at what the lower bound on losses could be instead of focusing on unlimited upper bounds, otherwise they risk losing substantial amounts of money 

Could Bitcoin hit a million dollars? Maybe even more, if cryptocurrency exchange Kraken’s CEO Jesse Powell is to be believed. Powell (not the Chairman of the U.S. Federal Reserve although the coincidence is uncanny) is bound to be bullish for Bitcoin – the fortunes of the business he leads are inexorably tied to the rise and fall of the world’s favorite cryptocurrency.

Cryptocurrency exchange Kraken makes money off transaction fees, and a soaring Bitcoin price bodes well for that business.

But Powell is not just a Bitcoin maximalist, he’s projecting a disruptive future for digital assets that would stretch the imagination of even the most ardent cryptocurrency fanatics. Speaking to reporter Emily Chang in a Bloomberg Television interview, Powell noted,

“We can only speculate, but when you measure it in terms of dollars, you have to think it’s going to infinity.”

“The true believers will tell you that it’s going all the way to the moon, to Mars and eventually, will be the world’s currency.”

It figures that Powell would speak in hyperbolic terms, especially as he let slip that Kraken is looking to go public as soon as next year, hot on the heels of the largest U.S. cryptocurrency exchange Coinbase’s listing this year.

But extreme predictions are nothing new in the Bitcoin world – in fact they help to drum up media attention to the speaker’s pulpit – how many can still remember Fundstrat’s Charlie Lee being mocked for his prediction that Bitcoin would hit US$25,000?

It wasn’t that Lee got Bitcoin’s price prediction wrong – it’s just that the timing was off. Lee was roundly ridiculed after that, and he committed to making no further price calls, but had investors listened to him, they’d have more than quintupled their money since that time.

Powell on the other hand sees Bitcoin one day exceeding the combined market cap of the dollar, euro and other fiat-based currencies, which can’t help but make one wonder what he’s smoking and whether we can score some of that action as well.

The truth is that price predictions are precisely that – predictions. And as we all well know, predictions can always be wrong.

The predictor can turn around and say, “sorry I was wrong,” if they even acknowledge they made a mistake (very few do).

As an unconstrained nascent asset class, it’s not incorrect to say that Bitcoin has no upper bound – it is worth as much as someone else will pay you for it.

As investors though, such ideological debates are of limited value – what’s more worth knowing is whether or not there is a minimum amount of dollars that someone will hand over for Bitcoin – in other words, is there a price floor?

Knowing there’s no ceiling just helps to lure in more speculation – knowing there’s a floor suggests there are fundamentals – and for now at least, there seems to be some evidence to suggest that there is one.

Given the increasing number of institutional investors getting into the Bitcoin game, there will be some segment of the investing market, particularly those who have been sitting on the sidelines when it came to crypto, who will come in when the price is low enough – driven by the measurably capped downside.

What that precise price for Bitcoin is however is far more difficult to say – the only thing that can be said with any degree of certainty is that that figure is a non-zero number. But that already says a lot.

For a nascent asset class that has been derided as a fraud and “rat poison squared” that the price floor for Bitcoin is non-zero should be more than enough grounds for celebration by Bitcoin maximalists.

Whether Bitcoin could be worth US$1 million one day on the other hand is far more speculative – and the problem with speculation is that it’s driven by greed, not fundamentals.

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SuperCryptoNews is a global leading blockchain and crypto news provider, covering daily news on the latest tech and trading developments in crypto. We bring you expansive crypto news coverage especially in Asia, with a focus on Singapore, Thailand and Southeast Asia.

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