Bitcoin has risen the most since it fell below $ 10,000 two weeks ago. However, the world's leading cryptocurrency has been giving investors mixed signals as it fails to decisively remove the $ 11K resistance.
Despite the hazy short-term outlook, new research has recently identified four market opportunities that could lead bitcoin to a multi-trillion-dollar valuation in the space of five years.
Game-changing market opportunities that could send Bitcoin's valuation to $ 3 trillion
A cryptocurrency analyst at ARK Invest, Yassine Elmandjra, published a report on September 17 titled "Bitcoin as an Investment." The analyst argued that bitcoin is currently "the most attractive asset since gold."
The report pointed to four key market opportunities that will trigger the next bitcoin titanic rally: bitcoin becomes a global settlement network, enabling personal sovereignty, bitcoin's ability to serve as digital gold, and bitcoin as hedge against devaluation. fiduciary.
Opportunity # 1: Bitcoin as a global settlement network
Elmandjra indicated that bitcoin could ultimately become the go-to settlement system for banks and businesses. The flagship cryptocurrency is best suited for this role because its value cannot be manipulated by a centralized body such as a central bank and it cannot censor transactions either.
Citing the Bitcoin economy as a settlement network, the report further stated:
"The Bitcoin network could settle a daily transaction with any other bank in a global network of 850 banks. In the United States alone, deposits totaling $ 14.7 trillion generate $ 1.3 trillion in settlement volumes between banks each year. If it were to capture 10% of those settlement volumes at a similar deposit rate, we believe that the Bitcoin network would scale more than 7 times from roughly $ 200 billion to $ 1.5 trillion in value. "
A market capitalization of $ 1.5 trillion translates to $ 75,000 per coin.
Opportunity # 2: Bitcoin as a non-sovereign asset
Bitcoin's attribute as a censorship-resistant currency makes it unique. The fact that the cryptocurrency is not sovereign suggests that the wealth of users cannot be confiscated by corrupt regimes directly or by inflation of fiat currency.
"If that probability were 5% on average globally, the market capitalization of bitcoin, or the value of the network, could multiply by more than 10, from $ 200 billion to $ 2.5 trillion," explained the analyst.
Opportunity # 3: Bitcoin outperforms gold to become a global store of value
Bitcoin's value proposition as digital gold is another argument the Ark Invest analyst gave his perspective on. Top crypto has long been touted as the digital version of gold, an asset that has served as a global store of value for thousands of years. However, cryptocurrency enthusiasts claim that bitcoin is better than gold as it is portable and verifiable, unlike the yellow metal.
Bitcoin, which captures just 10% of gold's market share, could boost its value to $ 1 trillion, a 5-fold increase from the current $ 200 billion.
Opportunity # 4: Bitcoin as a hedge against currency devaluation
The final argument for the value of bitcoin to potentially increase significantly over the next five years is its ability to act as a hedge against the weakening of national currencies. Bitcoin has emerged as a viable savings vehicle among citizens who have lost faith in their fiat currencies due to inflation and, in some cases, hyperinflation.
If bitcoin can take 5% of the global monetary base in addition to the four largest fiat currencies (the US dollar, the yen, the yuan, and the euro), the market capitalization of crypto could well reach $ 1.2 trillion. .
The investigation concludes stating that:
“Bitcoin offers one of the most compelling risk-reward profiles among assets, as our analysis suggests it should scale from approximately $ 200 billion today to $ 1-5 trillion in network capitalization over the next five to ten. years".
Meanwhile, bitcoin is trading at $ 10,610 at press time with a market capitalization of $ 197 billion. According to ARK Invest, a market capitalization of $ 3 trillion by 2025 means that bitcoin would be valued at just over $ 140,000.