Back believes that Bitcoin may reach the price of USD 300,000 in five years. Retail investors, rather than institutions, could be leading its growth.
In recent weeks, Bitcoin’s price has failed to stay above USD 10,000 per unit. The main cryptocurrency has climbed about 30% since the beginning of the year, but it is still far from its all-time high.
Cryptocurrency pioneer Adam Back has predicted that Bitcoin’s price will skyrocket to USD 300,000 per unit in the next five years, even without Wall Street’s institutional adoption.
Back said that Bitcoin may not need additional institutional adoption to reach USD 300,000. The current environment is leading more individuals to think about covering and retaining value when many countries are printing large amounts of money.
Last May, a statement by legendary investor Paul Tudor Jones led to a big increase in the price of the cryptocurrency. He revealed that he was buying Bitcoin as a hedge against the inflation that he predicts, due to the unprecedented levels of money printing by central banks.
Besides, Back said that this is causing people to think about the value of money and to seek ways to preserve it, in a difficult environment to obtain any return.
This cryptographer was the inventor of Hashcash, a verification system that Bitcoin uses. He was forced to deny that he is the mysterious creator of Bitcoin, Satoshi Nakamoto, after several complaints in recent weeks.
At the beginning of the year, Back talked about “hyper-bitcoinization” and “the argument of Modern Monetary Theory for high inflation”. He said that these could theoretically mean that Bitcoin will someday be worth USD 10 million.
On his Twitter account, he stated that Bitcoin at USD 100,000 does not seem to be that far away. He noted that the cryptocurrency has already exceeded the USD 10,000 threshold repeatedly, even when few expected it to go above USD 1,000 a few years ago and USD 10,000 was unthinkable.
Even though Wall Street appears to be approaching the cryptocurrency, the institutional adoption of Bitcoin is still very poor.
JPMorgan, which was once described as “Bitcoin’s biggest enemy,” has added its first cryptocurrency exchange customers. It seems that CEO Jamie Dimon held secret meetings with the head of the largest cryptocurrency exchange, Coinbase.
Goldman Sachs investors strongly criticized a report made by that institution, as it told the cryptocurrency community that the Wall Street giant was about to dive into cryptocurrencies last May.
Back’s most recent prediction about Bitcoin occurs as the Donald Trump administration considers another massive series of stimulus measures, possibly adding another USD trillion.
The USA has already approved the issuance of USD 3.5 trillion this year, as a relief measure to fight the economic crisis caused by the coronavirus pandemic. Likewise, they have implemented blocking measures to contain the virus.
The stimulus measures, as well as the fact that the Fed is moving towards supporting financial markets, mean that stocks and shares will resume their rising trend after an all-time decline in March.
Bitcoin’s price has also risen but has failed to break recent highs set in February. However, it is now more in contrast to fiat currencies due to the halving that took place last May. With this, the amount of Bitcoin that miners receive went from 12.5 BTC to 6.25 BTC per block mined.
By Alexander Salazar