An expert explains how factors like US debt, central banks’ adoption of Bitcoin, and more could increase demand for it.
According to a well-known South Korean analyst, there will be a 642% “ceiling” on the price growth of Bitcoin (BTC) over the course of the next ten years.
Per News1, the forecast came in a report from Kim Yu-min, a researcher at Hanwha Investment & Securities, named “Bitcoin: From Cyberpunk to Wall Street.”
Bitcoin Price Growth: Ceilings and Floors
According to News1, Kim’s research indicated that, in the upcoming ten years, “the future price of Bitcoin will rise by a minimum of 84% and a maximum of 642%” on current prices.
According to the news source, Bitcoin would reach “about 616 million won [$460,790]” by 2034 if its value increased by roughly 642%.
Based on data related to CDS and gold, Kim conducted the analysis. She noted that investors can also benefit from “value storage” and “decentralization” with Bitcoin.
The expert noted that Bitcoin is “easier to trade and store than gold.”
“In the modern era, a time when transactions between countries and individuals are increasing fast, [the crypto market] could potentially expand in size to outgrow the gold market.”Kim Yu-min, Researcher at Hanwha Investment & Securities
Furthermore, Kim noted that the likelihood of such presumptions increasing as lawmakers talk about the “possibility of using Bitcoin as a national reserve asset”
Bitcoin’s “upside potential” could reach 577%, according to Kim, should its popularity eclipse that of gold and make it a viable option for investors and global central bank reserve funds.
Furthermore, Kim said that “investors who hold US Treasury bonds buy CDS to hedge against the risk of the government defaulting and reduce their overall exposure to the US economy.”
Bitcoin and the wider crypto market are nursing sharp losses for the month so far even as global stocks rebound toward record highs https://t.co/6qQ3hByW2D
— Bloomberg (@business) August 19, 2024
These transactions, Kim explained, function “similarly to Bitcoin in terms of hedging central bank risk.”
US Debt and BTC State Adoption – ‘Key Factors’
According to the analyst’s calculations, the US government debt will continue to grow until 2034, when it is projected to reach $600 billion.
According to Kim, investing in bitcoin could help reduce the risk of a US government default. However, the expert noted that “other assets exist” and that BTC price rises could be as little as 162% in the next decade.
International firms are experiencing a DEMAND SLOWDOWN in China. No surprise.
— Steve Hanke (@steve_hanke) August 19, 2024
China’s MONEY SUPPLY (M2) is growing at only 6.2%/yr. That’s far below Hanke’s Golden Growth Rate of 11%/yr, a rate consistent with hitting China’s inflation target of 3%/yr. https://t.co/0waHDVyW6C
Nevertheless, Kim hinted that in the coming ten years, there would be other factors contributing to the rise in the price of Bitcoin.
The analyst said that there was “a possibility that countries with [poor] currency stability could adopt Bitcoin as a legal tender.”
“Bitcoin has the potential to lower remittance fees and increase accessibility to financial infrastructure.”Kim Yu-min, Researcher at Hanwha Investment & Securities
According to Kim, “Bitcoin’s upside potential is 642% if we assume that 10% of the yearly $1.6 trillion M2 supply flows into Bitcoin over the next 10 years.”
M2 is the term used by economists to describe the total amount of money that a nation’s citizens own or have in short-term bank deposits.
Earlier this summer, regulators in Argentina and El Salvador had discussions regarding El Salvador’s experience adopting Bitcoin.
El Salvador, which formally accepted Bitcoin as legal tender in September 2021, is still the only country in the world to have taken cryptocurrency adoption this far.