Tech’s Golden Rule Suggests Bitcoin Price to Cross $100,000 in 2021.
Bitcoin is trading at record highs on Monday, but the cryptocurrency may still be far from hitting its ceiling whooping of $4,500.
It rallied 16.19% since July 31, despite last week's fork that split it in two. It's up 465% since last year. A chief analyst at Goldman Sachs believes it will reach as high as $3,900 during the current wave, while RT analyst and crypto-proponent Max Keiser claims $5,000 is within sight.
According to analysis by Dennis Porto, a bitcoin investor and Harvard academic, bitcoin's price could hit $100,000 per coin if it continues to follow one of tech's "golden rules" — Moore's law.
The rule, which was devised in 1965 by Intel cofounder Gordon Moore, describes the exponential improvements of digital technology.
Typically, however, the rule applies to a technology's computing power or capabilities. This is the first time Porto has noticed a technology's price following Moore's law.
Since bitcoin's inception, according to Porto, its price has doubled every eight months.
Moore’s law specifically applied to the number of transistors on a circuit but can be applied to any digital technology … Any technology that is growing exponentially (i.e., ‘following Moore’s law’) has a doubling time.
"This poses a unique opportunity for investors: Whereas it was difficult to invest in circuits or internet speeds, it is easy to buy a bitcoin," Porto said.
Porto expects that this doubling trend could continue until bitcoin reaches mass adoption. Of course, another cryptocurrency could usurp bitcoin in the meantime.
By February 2021, Porto believes, it could be worth over $100,000.
Of course, Moore’s Law cannot extend into infinity. Eventually, circuits will no longer be able to hold any more transistors. Likewise, the bitcoin price will not continue to double every eight months in perpetuity; once adoption reaches critical mass, the rate of its price increase must necessarily taper.
Assuming bitcoin continues to follow this golden rule in the near-term, Porto anticipates the bitcoin price will extend beyond $100,000 by February 2021. Using the current BTC supply for simplicity’s sake, this would give bitcoin a market cap of about $1.65 trillion. Needless to say, a $100,000 bitcoin price would thrill today’s investors, assuming they have the fortitude to resist the temptation to sell them.
Well, there would be at least one investor who might not be pleased. That would be John Mcafee, the eccentric software pioneer and former United States presidential hopeful, who famously promised to perform a shocking anatomical act on live television if the bitcoin price did not reach $500,000 by 2020.
While multiple well-known commentators have contributed their opinions on how much one Bitcoin will cost in the next five or 10 years, $100,000 by 2021 is at the bolder end of the spectrum.
This week, Max Keiser repeated his faith in Bitcoin reaching $5,000 in the coming months.
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