One Bitcoin is Still Worth One Bitcoin
At this year’s Web summit on a panel discussion with Garry Tan, Peter Smith and Jen Wieczner of Fortune Magazine, billionaire venture capitalist Tim Draper reaffirmed his belief that Bitcoin will achieve a price of $250K by 2022. He bases this prediction not only on strict economics but in the paradigm shift that Bitcoin and cryptocurrencies represent. For Draper this paradigm shift means thinking globally. “Human beings are tribal creatures,” he observes. And where geography and politics once fostered and represented a separation of tribes, Bitcoin and blockchain technology presents an opportunity to build one tribe. As one tribe, participants engage in a global economy where “geographic borders become less important.” Draper argues that “political currencies” are going to fail against digital currencies such as Bitcoin. Artificial borders based on politics and geography are stripped away. Never before in human history have human beings been presented with such a choice.
Bitcoin is the Obvious Choice
While these Bitcoin price claims are irrational exuberance for some, Draper continues his explanation by shifting to the numbers. When asked about his past prediction, he reiterates: “Okay, there is eighty-six trillion in political dollars in the world. We are talking about getting 5% market share to get to $250k. That seems like a drop in the bucket. All we have to do is make it that Bitcoin can be used by Starbucks coffee. My prediction at $250k by 2022, 2023 in that range is solid.” He is clear that the technology is not yet there but is developing at a rapid pace. If Bitcoin achieves use as a true medium of exchange, why would political currency be used when given the choice? Central authorities become irrelevant when true peer to peer networks are utilized on a worldwide scale. One world, one tribe.
This argument does not just apply to individuals. Some will be forced to choose Bitcoin. When a conversation concerning crypto-platforms emerges, Draper argues that a real shift will occur at the institutional level. “Nobody with a crypto-platform is going to want to sell for political currency…if Goldman [Sachs] recognizes they can only buy Coinbase with Bitcoin and they can’t use that fiat junk…they are going to have to buy it up, and the price will go up.”
Considering Coinbases’ billion dollar-revenues during a bear market and the cryptocurrency market’s continued growth year to year, an institutional move such as that could reasonably bring prices into the $250k range. Either way, when pressed for a more short-term price prediction, Draper is sure that “a year from now it’s higher.”
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