While we are only four and a half months in, 2020 has already been a crazy year for Bitcoin, for the American economy, and the whole world.
Some have argued that the harrowing macroeconomic outlook could present a true risk to cryptocurrencies. Blockchain Capital’s Spencer Bogart told Bloomberg last year:
“When you think about really severe crises taking place, a liquidity crunch, another global financial crisis, I think that Bitcoin will struggle to do very well from a price perspective.”
But one prominent Wall Street veteran believes the global outbreak of COVID-19 will cause the value of BTC to skyrocket past its $20,000 high.
The price target the investor speculated is ~$500,000 per coin. Here’s why he thinks this isn’t such a crazy prediction.
Bitcoin hitting $10 trillion market cap is “easily achievable”
Raoul Pal — chief executive of Real Vision and a former Goldman Sachs executive — recently sat down with one of Bitcoin’s earliest public bulls, Max Keiser, to talk about the outlook for cryptocurrencies.
Responding to an inquiry from Keiser regarding Bitcoin’s potential to begin to rival gold, which has approximately a $9 trillion market capitalization, Pal remarked:
“If it becomes an ecosystem, and we believe it will be and it will take the whole ecosystem with it as well, then yes, I think a $10 trillion number is easily achievable within that process.”
A $10 trillion market capitalization corresponds with more than $500,000 per coin.
The timelines are accelerating
While Pal held the belief that Bitcoin could skyrocket to trillions long before the COVID-19 outbreak, the ongoing macroeconomic conditions are increasing the chances crypto performs well, he has suggested.
Per previous reports from CryptoSlate, he postulated in the April edition of his research newsletter “Global Macro Investor” that due to the economic and monetary fallout of the COVID-19 outbreak, there’s a genuine risk “of the failure of our very system of money” or at least a collapse of the “current financial architecture.”
Pal has specifically cited a potential deflationary spiral caused by the lack of spending, which he believes will cause the value of the U.S. dollar to shoot up while individuals, corporations, and governments will have to default on their record levels of debt.
That’s where Bitcoin comes in, which many individuals may turn to should their currencies and institutions fail them in these tumultuous times. Explaining the value of BTC in “Global Macro Investor,” he wrote:
“Bitcoin is an entire trusted, verified, secure, financial and accounting system of digital value. […] It is nothing short of the future of our entire medium of exchange system, and of money itself and the platform on which it operates.”
