Bitcoin Price Prediction 2040: Hal Finney and 3 Top Experts Weigh In
As we witness the ongoing evolution and adoption of Bitcoin, its impact on the global economy makes one thing clear: Bitcoin’s potential is far-reaching and the possibilities are limitless.
Disclaimer: The Bitcoin price predictions below do not necessarily reflect the views of Swan Bitcoin. Swan does not make public Bitcoin price predictions. The purpose of this article is an attempt to show how several prominent figures reached their forecast, and is presented for the reader’s consideration.
In the early days, visionary cryptographer and Bitcoin pioneer Hal Finney boldly predicted that each Bitcoin could one day reach a staggering $10 million in value. Finney was the first recipient of Bitcoin other than Satoshi.
This article examines a range of factors that could forecast the price of Bitcoin in 2040. It delves into the historical trends of Bitcoin prices to gain deeper insights to assess potential scenarios for Bitcoin’s future valuation.
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Hal Finney’s prediction was not based on mere speculation but rather on a thoughtful analysis of Bitcoin’s potential as a global payment system.
He envisioned a scenario where the collective value of Bitcoin would align with the total wealth of the world, which he estimated to be within the range of 100 trillion to 300 trillion dollars. By dividing this value among the limited supply of 21 million Bitcoin, Finney’s calculation resulted in an astonishing value of $22,074,619 per Bitcoin.
This prediction may have seemed highly speculative or even absurd to a casual observer at the time. However, many people today share Hal’s opinion about Bitcoin’s price potential. Here, we present the perspectives of three notable experts who have offered their own Bitcoin price predictions.
Let’s meet the experts:
The renowned financial services firm Fidelity has been closely monitoring the development of cryptocurrencies. Drawing on their extensive research and analysis, Fidelity presents their insights into the future of Bitcoin and its potential impact on the financial landscape.
Chamath Palihapitiya, a prominent venture capitalist and early Bitcoin investor, has made significant waves in the crypto community with his bold predictions. Palihapitiya’s views on the future of Bitcoin offer a captivating glimpse into the potential growth and adoption of this digital asset.
Max Keiser, a seasoned financial broadcaster and Bitcoin advocate has long been known for his outspoken and sometimes controversial predictions. Keiser’s unique insights into Bitcoin’s price movements and broader global economic implications provide a thought-provoking perspective.
Jurrien Timmer, the Director of Global Macro at Fidelity Investments, thinks the value of a single Bitcoin could reach $1 billion by the year 2038 — very close to our Bitcoin price prediction 2040 target date. He also thinks Bitcoin could reach $100,000 by the end of 2023.
Timmer’s demand model is rooted in Metcalfe’s Law. It claims the value of Bitcoin will grow steadily to about $1 million per full Bitcoin by 2030. A network like Bitcoin comprises a set of nodes that form connections with one another and follow a protocol, a group of rules.
Metcalfe’s Law states the value of a network is proportional to the square of the number of nodes, or members, in the network. When applying Metcalfe’s Law to protocols, the first protocol to get to this ‘critical mass crossover point’ begins to develop a supermajority feedback network effect.
Jurrien further broke down his reasoning on Twitter.
According to Fidelity, 90% of its largest clients have expressed interest in purchasing Bitcoin and other cryptocurrencies. To cater to the needs of large institutional clients, Fidelity established Fidelity Digital Assets, focusing on developing Bitcoin custody solutions.
In June of 2022, Fidelity Digital Assets division released a price modeling document titled: Valuing Bitcoin — Modeling the Price of Bitcoin as a Monetary Asset Through Market Forces.
Bitcoin has the largest cryptocurrency user base and network. As institutions like Fidelity help onboard its clients into the Bitcoin Standard, its value increases exponentially, attracting more users and reinforcing its position as the top digital asset.
On November 1st, Timmer revisited his 2020 thesis in a Twitter thread.
Palihapitiya sees Bitcoin as a digital asset with unique properties, positioning it as a potential global reserve currency. His 2042 prediction is also close to our Bitcoin price prediction 2040 target date. He argues that Bitcoin’s decentralized and borderless nature, scarcity, and inherent security features make it an ideal store of value.
In January 2021, Chamath told CNBC:
“The reason is because, every time you see all of this stuff happening, it just reminds you that wow, our leaders are not as trustworthy and reliable as they used to be… [s]o just in case, we really do need to have some kind of, you know, insurance we can keep under our pillow that gives us some access to an uncorrelated hedge.”
Bitcoin’s limited supply is a crucial factor in Palihapitiya’s prediction. With a maximum supply of 21 million coins, Bitcoin is designed to be deflationary, meaning its scarcity increases over time. Palihapitiya believes this scarcity, combined with increasing global adoption, will drive demand and result in significant price appreciation over the long term.
In December 2020, JPMorgan publicly stated that it forecasts that gold will likely suffer for years directly because of Bitcoin. The inflation rate on the Bitcoin network is already less than 2%.
In 2021, just before Bitcoin’s all-time-high peak, Chamath said Bitcoin had “effectively replaced gold.”
In June 2022, authorities in Uganda revealed a significant find of around 31 million metric tonnes of gold ore within the nation. This discovery could yield up to 320,158 metric tonnes of purified gold, with an approximately $12 trillion valuation.
This single new discovery represents more than the entire amount of gold above ground and accounted for in total supply. As this gold is recovered, it will begin to significantly dilute the scarcity properties of the metal.
Bitcoin was engineered to be deflationary over time. In the next block halving event (which should occur in April 2024) — its inflation rate will be only 0.84%. This monetary policy makes for an ideal store of value over long periods. With a fixed maximum supply of 21 million coins, Bitcoin’s scarcity sets it apart from fiat currencies susceptible to devaluation and even physical gold.
Palihapitiya emphasizes the growing interest and adoption of Bitcoin by institutional investors. The involvement of major financial institutions, such as Tesla, MicroStrategy, and PayPal, has contributed to Bitcoin’s legitimacy as an investment asset.
As more businesses, institutions, and family office-type investors recognize Bitcoin’s potential as a hedge against the legacy banking system and a diversification tool, Palihapitiya expects increased capital inflows and further price appreciation.
Palihapitiya’s Bitcoin price prediction spans 20 years, emphasizing the long-term nature of his outlook. He doesn’t believe the U.S. dollar will lose its reserve currency status anytime soon. He acknowledges that Bitcoin’s path to becoming a global reserve currency will likely face numerous challenges and regulatory hurdles.
However, he remains optimistic about its potential to disrupt traditional financial systems and that Bitcoin could achieve significant value appreciation over two decades.
Keiser believes that the global economic landscape, marked by excessive debt levels, currency devaluation, and geopolitical uncertainties, creates a favorable environment for Bitcoin. He argues that traditional fiat currencies are prone to inflationary pressures and can be subject to political manipulation.
He is very outspoken in his belief we are at the 300-year end-game for the central banking ponzi scam. In contrast, Bitcoin’s decentralized nature and limited supply make it an attractive alternative for individuals seeking a store of value and protection against economic volatility.
Keiser often criticizes central bank policies, such as quantitative easing and low interest rates, which he views as detrimental to the stability of fiat currencies.
According to Keiser, these policies erode the value of traditional currencies and push investors towards alternative assets like Bitcoin. He sees Bitcoin as a hedge against the risks associated with central bank interventions. He believes that its decentralized nature and mathematical scarcity make it a reliable store of value. Keiser contends Bitcoin is the ultimate insurance policy and hedge against the traditional central banking system.
Despite Bitcoin’s reputation for volatility, Keiser sees it as an opportunity rather than a drawback. He argues that Bitcoin’s price volatility gives traders and investors significant profit potential. Keiser often encourages individuals to embrace volatility and use it as an advantage when entering the Bitcoin market.
Kesier is also on record stating he believes Bitcoin will eventually reach $1M per BTC, closer to our Bitcoin price prediction 2040 target date.
Today, Bitcoin makes up ≈0.05% of the pool of investable assets. If Bitcoin captured (X%) of each, what price prediction conclusions can we draw from this?
Bitcoin Price Prediction Math: $200 trillion / 21 million BTC = $9,523,809.52 per BTC
Before we can provide any Bitcoin price prediction, we first must consider the various factors influencing price movements:
With only 21 million Bitcoin that will ever exist, scarcity plays a crucial role in determining Bitcoin’s price. As demand for Bitcoin increases, especially in the face of limited supply, the price likely increases. Conversely, when demand falls or stagnates, the cryptocurrency faces downward pressure, and the prices may drop.
Due to the Difficulty Adjustment mining algorithm component, Bitcoin’s supply curve is deterministic. This adjusts the difficulty of the mining process such that no matter how little or how much mining hash power is applied, the average block interval remains anchored for around 600 seconds or 10 minutes.
In addition, the Bitcoin halving events, which occur roughly every four years, reduce block rewards for miners by half. This periodic decline in newly minted Bitcoin further restricts supply and can potentially spark bullish price action. In the year leading up to Bitcoin halving events, many investors come out with their own Bitcoin price predictions. So, what other factors should we consider?
As with any asset, market sentiment significantly impacts Bitcoin’s price. Positive news, recommendations from influential figures, or institutional investments can trigger FOMO (Fear Of Missing Out) among investors and lead to price increases. Conversely, negative news, regulatory uncertainties, or security breaches can lead to panic selling and, thus, price falls.
Bitcoin’s value is linked to its adoption and utility. Technological developments that improve the network’s scalability, security, and efficiency can enhance confidence in Bitcoin and potentially drive its price upwards. Moreover, increased merchant acceptance and widespread use cases contribute to the perception of Bitcoin as a viable payment method, further impacting its price.
The regulatory landscape significantly impacts the cryptocurrency market. Favorable regulations that provide clarity and legitimacy can attract institutional investors and contribute to price growth. Conversely, adverse regulations or prohibitive measures may dampen market sentiment and negatively affect Bitcoin’s price. They can dramatically change Bitcoin price predictions as new developments come to pass.
Since its inception, Bitcoin’s price has seen extreme fluctuations. In its early days, the cryptocurrency traded for fractions of a cent, but in late 2013, it skyrocketed to about $754.01, up a whopping 5,481.1% for the year. This meteoric rise was followed by a sharp decline known as the “Bitcoin bubble,” which saw the price plummet to around $200 in 2015.
The most notable surge in Bitcoin price occurred in late 2017 when it hit an all-time high of nearly $20,000. However, the ensuing market correction caused the price to drop back to the $3,000 to $4,000 range in subsequent years. Recently, Bitcoin price has seen robust growth and consolidation periods, underscoring its ongoing volatility.
Bitcoin’s historical price charts show recurring patterns and cycles, such as halving-induced supply shocks and boom-and-bust cycles after periods of rapid growth. Identifying these patterns can provide insight into how Bitcoin’s price might move.
For example, historical halving events have been followed by significant price increases due to reduced supply and increased demand. However, past performance does not guarantee future results, and additional factors such as macroeconomic conditions, technological advances, and regulatory developments must also be considered.
Previous attempts to predict Bitcoin’s price have yielded mixed results. While some analysts accurately predicted large price movements, others missed critical turning points in the market. These differences highlight the inherent challenges of predicting an asset as complex and volatile as Bitcoin.
Investors must understand that all Bitcoin price predictions are speculative and subject to numerous variables. Getting a balanced and comprehensive outlook based on available data and expert insight is essential while emphasizing the importance of prudent and well-informed investment decisions.
Exploring the insights of three notable experts, we find a compelling case for Bitcoin’s positive trajectory…
These experts emphasize various factors that contribute to Bitcoin’s growth. The adoption of Bitcoin by institutional investors, such as BlackRock’s Larry Link, Fidelity’s clients, and major corporations like Tesla, bolsters its legitimacy and attracts capital inflows. Bitcoin’s decentralized nature, limited supply, and superior store of value properties make it an appealing alternative to traditional fiat currencies in a world plagued by inflation and economic uncertainty.
Network effects play a vital role in Bitcoin’s trajectory. As more individuals, institutions, and merchants embrace Bitcoin, its value increases, driving further adoption. With each new participant, Bitcoin’s network effects strengthen, reinforcing its position as the premier cryptocurrency.
While volatility is often a concern, experts like Max Keiser see it as an opportunity. Bitcoin’s price fluctuations present the potential for significant profits for those willing to embrace the volatility and enter the market strategically.
Looking ahead, the case for Bitcoin’s bright future is compelling. Its disruptive potential, growing institutional adoption, and technological advancements position it as a transformative force in the financial world. As Bitcoin gains wider acceptance, its value proposition strengthens, attracting more users and reinforcing its status as the premier digital asset.
While precise price predictions remain elusive, the overall consensus points toward a positive trajectory for Bitcoin. As we witness the ongoing evolution of Bitcoin and its impact on the global economy, one thing becomes clear: Bitcoin’s potential is far-reaching, and the possibilities are limitless.
Despite the vastly different timeframes of these predictions, the overall consensus points toward a positive trajectory for Bitcoin. The once audacious projections of early visionaries like Hal Finney are beginning to warrant serious consideration.
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