Binance CEO Says $100,000 Bitcoin Is “Not Hard to Imagine”

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The entire world, including the Bitcoin industry, has been ravaged by the coronavirus outbreak over the past few weeks; indeed, to mitigate the spread of COVID-19, authorities have been forced to enact emergency measures, thereby shutting down thousands of businesses (both big and small) and resulting in millions laid off around the world.

It’s no surprise, then, that governments have been forced to react, to try and save their flailing constituents. Nearly all of the world’s governments have announced packages to help support the unemployed, underemployed, sick, and hurting businesses.

But the U.S. has gone big. Really big.

Speaking in a White House press conference on March 24th, White House economic advisor Larry Kudlow said that the United States government’s stimulus package will “come to roughly $6 trillion.”

To contextualize this amount of money, $6 trillion is equivalent to one of many things: one-third of America’s entire GDP, a bit bigger than Japan’s GDP, 130% of the Federal Reserve’s balance sheet, enough money for $850 for every human being on Earth, or enough money to buy 900 million Bitcoin at current prices.

Many Bitcoin bulls have run with the narrative that the astronomical size of this stimulus package as a way to accentuate how likely it is for BTC to pass seemingly astronomical prices.

Bitcoin Could Easily Hit $100,000?

Dan Held of Kraken recently remarked that the $6 trillion stimulus package “for just one country” is adding to the chance the price of Bitcoin reaches a $2 trillion market cap, which equates to around $100,000 per coin in circulation — just under 1,500% higher than the current price.

$6,000,000,000,000 stimulus package for just one country.

And you don't think Bitcoin can reach a $2T market cap? ($100k/coin)

🤔

— Dan Hedl (@danheld) March 24, 2020

This was echoed by Changpeng “CZ” Zhao of Binance, who quipped that with the talk of “trillions,” a $100,000 BTC price is “not such a hard to imagine number now,” adding that it is easy for the price of the cryptocurrency to reach that level due to the limited supply that exists on the market.

Indeed, as the world’s governments begin to print trillions of dollars for economic reasons, there should be a sharp increase in demand for scarce assets, be that gold or Bitcoin, which have already started to outperform traditional markets over the past few days seemingly due to the news of these trillion-dollar stimulus packages.

The Math Adds Up

As crazy as $100,000 may seem now, math is on the side of these individuals calling for a six-figure Bitcoin price.

In March of 2019, PlanB — a pseudonymous institutional investor based in Europe that analyzes Bitcoin as a personal passion — released a famous article on Medium titled “Modeling Bitcoin’s Value with Scarcity.”

The article contained the below image, which shows that Bitcoin’s market capitalization over time can be plotted on a logarithmic regression, which has an R squared of 95%, or extremely accurate in non-statistics lingo.

The model predicts that BTC will have a fair value of $55,000 to $100,000 — ten to twenty times the current value — after the halving due to the emission shock.

bitcoin scarcity

Notably, the model doesn’t predict Bitcoin will immediately spike to six digits after the halving takes place in May, but it predicts a long-term rally towards the fair value.

Fundamentally, the model makes sense: the price of BTC is constantly being depressed by the coins that are being sold by miners, which need to fund their operations. Halvings decrease the number of coins that are given to miners, resulting in less selling pressure.

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Original Article – Blockonomi.com