Could Bitcoin Go to $1 Million? Expert Insights & Predictions

30 de octubre de 2024

Author: Bitcoin Magazine Pro Team

Bitcoin is a hot topic today, especially with the recent surge in its price. This has led many investors to ask: Could Bitcoin go to $1 million? To put this number into context, if Bitcoin reached this level, it would be an astonishing 2,000% increase from its current price of around $69,000. It would also mean that Bitcoin would have a market cap of about $21 trillion—more significant than the current market cap of gold. These figures can be dizzying, and keeping your bearings as they change and fluctuates can be hard. This article untangles what a Bitcoin price of $1 million would mean by examining its implications within the broader market and Bitcoin supply and demand. This way, you can gain clear, expert-backed insights on Bitcoin to help you confidently make informed investment decisions.  

Bitcoin Magazine Pro’s Bitcoin analysis tool provides valuable data, charts, and insights to help you understand Bitcoin’s current trends and movements.

What Determines the Bitcoin Price?

what determines price - Could Bitcoin Go to $1 Million

Bitcoin (BTC) extended its gains on Tuesday and trades around $71,000 after bouncing from a key technical level last week. The technical outlook suggests a bullish bias for BTC, projecting a new all-time high at $78,900 in the short term. 

This bullish outlook is reinforced by increasing institutional demand through ETFs, which saw over $472 million in inflows on Monday, building on last week’s gains. The long-to-short ratio reached its highest level in October, and Bitcoin’s Open Interest hit a new high of $42.23 billion.

Institutional Interest in Bitcoin Remains Robust

Institutional demand for Bitcoin remains strong. Coinglass ETF data shows that US spot Exchange-Traded Funds (ETFs) saw an inflow of $427.60 million on Monday, marking four consecutive inflows. This trend could fuel the ongoing Bitcoin price rally if it continues or intensifies.

CryptoQuant data indicates that BTC may be poised for another bull run. The percentage of Bitcoin held by US entities has increased again, such as:

  • Exchanges
  • Banks
  • Funds

Historically, this uptick preceded the strong bull run in late 2023, suggesting that if history repeats, BTC could experience a rally in the coming days.

On-Chain Metrics Support Bitcoin Rally

Looking down at Bitcoin’s on-chain metrics reveals signs of optimism. Coinglass data shows that futures Open Interest (OI) at exchanges hit a new all-time high of $42.23 billion on Tuesday, indicating that new capital is entering the market and driving fresh buying activity. 

Understanding Bitcoin’s Unique Supply and Demand Dynamics

The price of Bitcoin (BTC), unlike traditional fiat currencies such as the Euro or the U.S. Dollar, is not determined by a centralized authority like a central bank. Instead, Bitcoin’s price is determined based on supply and demand. Bitcoin has a supply cap where no more than 21 million BTC will ever exist. 

Bitcoin’s price increases when demand exceeds supply and decreases when demand falls. Other factors that can influence the supply and demand and, thus, affect the bitcoin’s price are the following:

  • Cost of producing Bitcoin through mining
  • Regulations
  • News

From Scarcity to Value: How Bitcoin’s Supply Cap Affects Price

The volatility of Bitcoin’s price has left many skeptics questioning the mathematical and economic basis of price movements while searching for a generalized justification for its valuation. Since Bitcoin is decentralized, it doesn’t follow the monetary policy of governments, and any underlying asset or government does not back Bitcoin. 

This creates skepticism among investors and consumers who appreciate the price stability signals a fiat currency enjoys from government policy and support.

Supply and Demand for Bitcoin

The price of Bitcoin is determined by supply and demand, the same way the value of the U.S. dollar is determined. Like fiat currency, Bitcoin's price increases when demand increases, and when demand falls, it drops. It is reasonable to assert that factors that increase Bitcoin's utility increase its price directly or indirectly. For instance, the Lightning Network enables Bitcoin to be used as a medium of exchange in commerce. 

This has positively impacted Bitcoin’s adoption and, thus, generally increased demand for it. On the supply side, Bitcoin is a unique asset in that its new supply schedule is inelastic; it is entirely immune to fluctuations in demand. When demand for most goods, including fiat currency and gold, rises, producers react by increasing production and returning prices to an equilibrium. When demand for bitcoin rises, thanks to the difficulty adjustment, the production of new bitcoin does not rise. 

Stock-to-Flow 

The stock-to-flow (S2F) model is commonly used to analyze the impact of scarcity on an asset's price. The stock-to-flow ratio indicates how many years it will take to produce the current stock at the current production rate. The stock-to-flow ratio is the inverse of an asset's inflation rate. According to the stock-to-flow model, a higher stock-to-flow ratio should yield a higher price. 

Every four years, the Bitcoin halving cuts the block subsidy in half, reducing the flow of new Bitcoin into the market, thereby increasing the stock-to-flow ratio and making Bitcoin even more scarce. If the stock-to-flow model is applied to Bitcoin, this should trigger a price rise, and indeed, each past halving has triggered a dramatic price rise in the following months. Whether these price appreciations validate the stock-to-flow model is still much debatable.

How Does Bitcoin’s Scarcity Influence Price? 

Bitcoin’s scarcity significantly impacts its price, mainly because there is a hard cap on the total amount that will ever exist—only 21 million bitcoins. Unlike fiat currencies, which central banks can print indefinitely, Bitcoin’s supply is fixed. This scarcity is reinforced by how new bitcoins are created through the mining process, designed to slow down production over time through halving. As a result, as demand for Bitcoin increases, the limited supply exerts upward pressure on its price. 

Bitcoin’s monetary policy is transparent and predictable. Everyone knows exactly how many bitcoins are currently available and the maximum number. This transparency gives investors confidence, as unexpected increases in supply cannot dilute Bitcoin’s value. Bitcoin's known scarcity and predictability make it a compelling option for investors looking to protect their wealth from inflation or monetary debasement, where traditional currencies might lose value over time. 

Fiat Currency Inflation vs. Bitcoin's Finite Supply: Impact on Volatility and Value

The creation and distribution of fiat currency are potentially infinite and unpredictable. Most central banks target a relatively low inflation rate. Still, a small committee can change these rates at any time, and the actual inflation rate of fiat currencies is nearly impossible to measure. 

For example, the Federal Reserve targets a 2% inflation rate, even though the exact rate is significantly higher. 

Due to its finite supply and relatively small market cap, Bitcoin's price is also much more sensitive to changes in demand, resulting in increased volatility.

Inflation and Deflation 

Inflation occurs when the money supply or velocity of money increases rapidly, causing prices to rise and reducing the currency's value. Bitcoin is deflationary due to its finite supply, which protects it from hyperinflation. A government’s ability to print an unlimited amount of currency has caused periods of hyperinflation that have driven the value of many fiat currencies, including the German Mark and Zimbabwean dollar, down to zero. 

Based on available economic data, Bitcoin’s price appears to be influenced by the liquidity available in global capital markets. When more money is available, the price tends to increase. 

Economists do not support concerns about deflationary spirals; supply and demand have permanently corrected deflationary events in Bitcoin and fiat currency. Bitcoin's finite supply also makes it a secure long-term store of value, comparable to and, in some cases, more advantageous than gold.

Bitcoin's Price and Regulations 

Bitcoin was released after a financial crisis precipitated by the loosening of regulations in the derivatives market. It remains unregulated and has garnered a reputation for its cross-border capabilities and regulation-free ecosystem. Bitcoin’s lack of regulatory status has both benefits and drawbacks. The absence of regulation means it can be used freely across borders and is not subject to the same government-imposed controls as other currencies. 

Its price is very responsive to regulatory developments. For example, in the United States, Bitcoin rulings delivered by the Securities and Exchange Commission (SEC) can impact the price of bitcoin.

The Impact of Regulatory Decisions on Bitcoin's Price: ETFs and Global Bans

In October 2021, prices surged to $69,000 a few weeks after the SEC approved the first U.S. bitcoin-linked ETF: the ProShares Bitcoin Strategy ETF (BITO). A few months after reaching that price, bitcoin's price hovered around $40,000. 

China's bitcoin trading and transaction ban in September 2021 affected the supply and demand. Mining farms in China were forced to pack up and move to Bitcoin-friendly countries. Prices fell from around $51,000 at the beginning of September to about $41,000 at the end of the month, then quickly regained and surpassed previous price levels as operations picked back up.

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Could Bitcoin Go to $1 Million And Why?

why it can go to one million - Could Bitcoin Go to $1 Million

Bitcoin's price may seem random, but it follows real-world supply and demand. Understanding these factors helps predict where the price might go. Bitcoin has a fixed supply of 21 million coins, with about 19.4 million already mined and 1.6 million left to go. The last Bitcoin will be mined around 2140.

Every four years, Bitcoin goes through a "halving," where the reward for mining new coins is cut in half. This reduces the supply of new Bitcoins, often driving up prices. The next halving is expected in 2024 and could significantly affect Bitcoin’s value, just as past halvings have.

Expert Predictions Show a Million-Dollar Bitcoin Price Is Possible

Several experts agree that Bitcoin could be worth a cool million less than a decade from today. Does that idea make any sense? Absolutely. Every time Bitcoin shows signs of life, investors wonder how much it could be worth in the long run. In the early days, Bitcoin didn't seem to be worth anything. The first known purchase of a physical thing with payment by digital currency was a May 2010 order of two large pizzas in exchange for 10,000 Bitcoins. 

The currency surged to $1,000 per Bitcoin in 2013, stopped just short of the $20,000 mark in 2017, and soared to roughly $68,800 per coin in November 2021. Bitcoin has come a long way from the pizza-based price of 0.2 cents per coin. At today's $21,230 per Bitcoin price, Laszlo Hanyecz effectively spent $212 million on those tomato pies. So, if the value is multiplied by more than 10 million times in 12 years, it might seem fair to expect a million-dollar price tag within the next decade.

The Bitcoin Bull Club

Reaching $1 million per Bitcoin by 2030 is a popular projection. BitMEX's ex-CEO, Arthur Hays, made that prediction four months ago. Famous growth investor Cathie Wood set the same target in April 2022. Serial entrepreneur Anthony Pompliano took the stage at the same Bitcoin 2022 event to say that Bitcoin could reach $500,000 or $1,000,000 shortly -- but anything beyond that would require a social collapse and total meltdown of the U.S. dollar. 

In early June, in a CNBC interview, MicroStrategy (MSTR 8.96%) chairman Michael Saylor doubled down on his bullish price predictions: "It's not going to zero. If it's not going to zero, it's going to a million because it's better than gold at everything that gold wants to be." 

These Bitcoin bulls indeed have significant financial interests in the Bitcoin market. For example, if the coin ever reaches $1 million, the company's current cache of roughly 130,000 Bitcoins would soar from $2.8 billion to $130 billion. As a result, MicroStrategy would be a financial heavyweight with Bitcoin-based cash reserves comparable to software-sector rivals Microsoft and Alphabet.

Big Names Back Predictions Bitcoin Could Hit $1 Million

Twitter co-founder Jack Dorsey says the price of Bitcoin could reach at least $1 million by the year 2030, adding that its value could grow even further from that point onward. Speaking in a May 9 interview with journalist Mike Solana on Pirate Wires, Dorsey offered a bullish outlook for the long-term price action of Bitcoin (BTC), as well as providing further context behind his abrupt departure from the board of BlueSky -- a decentralized Twitter alternative he helped launch in 2019. Dorsey told Solana he believes Bitcoin's price could reach "at least a million" by 2030, adding that it most likely "hits that number and goes beyond." 

Dorsey, now the head of the financial services firm Block, noted that Bitcoin's price could be a more exciting aspect of Bitcoin and instead pointed to the collaborative nature of the ecosystem and the way it incentivizes collective efforts to enhance the network. "The most amazing thing about Bitcoin, apart from the founding story, is anyone who works on it, or gets paid in it, or buys it for themselves, everyone who puts any effort in to make it better, is making the entire ecosystem better, which makes the price go up. It's a fascinating ecosystem and movement, more than anything else," he said before adding, "It taught me a lot."

What Could Go Wrong? 

Regulators and governments worldwide are still figuring out how to deal with these newfangled digital assets. Some may set up overly draconian frameworks, including Bitcoin: 

  • For trading
  • Transactions
  • Ownership

The domestic rulemaking effort is significant to us American investors, of course. It'll take a couple more years before this particular source of uncertainty calms down. Bitcoin certainly has a leg up on the competition when disrupting the gold market, but that future is still being determined.

Another name could grab Bitcoin's crown, challenging early investors to adapt or get left behind. So, Bitcoin enthusiasts like Michael Saylor and Arthur Hays could still lose it all. Bitcoin is here to stay, and there's good reason to believe that Bitcoin will remain a cornerstone of this evolving market. There will be volatility along the way, and the current crisis could last for years as the last one did. That's alright. I'm in this investment for the long run.

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Could the Bitcoin Price Go to Zero?

could it go to zero - Could Bitcoin Go to $1 Million

Yes. Like any other currency or asset, Bitcoin could lose all perceived value. This would mean that absolutely no one wanted to use, mine, or hold the Bitcoin or that they preferred some other successor asset.

What Happens If Bitcoin Crashes to Zero?

The implications of Bitcoin crashing to zero would be dire, but the chances of it happening are exceedingly low.  Like any other asset or investment, the value of Bitcoin is subject to market forces. It can be affected by various factors, including:

  • Supply and demand
  • Investor sentiment
  • Regulatory actions

Bitcoin has several unique features that make it less likely to go to zero than other assets. Bitcoin is decentralized, meaning any single entity or institution does not control it. This makes it more resistant to censorship or government intervention and gives it a level of resilience that other assets may not have. Additionally, Bitcoin has a fixed total supply of 21 million coins, which is expected to be thoroughly mined around 2140. This fixed supply helps to ensure that Bitcoin remains scarce, which can contribute to its value. 

The Dual Nature of Bitcoin: Growing Adoption vs. Inherent Risks

Furthermore, Bitcoin has been adopted by a growing number of individuals, businesses, and institutions around the world. This adoption has helped increase its liquidity and legitimacy, making it more difficult for the mainstream financial community to dismiss or ignore it. 

Despite these factors, Bitcoin still carries volatility, hacking and security risks, and regulatory uncertainty. These risks can impact the price of Bitcoin and cause investors to suffer significant losses. While Bitcoin's value could reach zero, this is unlikely due to its unique features and growing adoption. As with any investment, it is essential to carefully evaluate the risks and potential rewards before deciding.

What ‘Far-Fetched’ Scenarios Could Still Send Bitcoin Price to $0?

Speaking to Cointelegraph, Jonathan Isaac, chief marketing officer at CoinMarketCap, said that while Bitcoin hitting zero is theoretically possible, it’s “doubtful” without a “catastrophic event.” 

Isaac said that if everyone who holds Bitcoin suddenly decides it’s worthless and sells simultaneously, its value could plummet. 

“Given how huge, global, and passionate the Bitcoin community is, that’s pretty hard to imagine,” he added. “Plus, people use Bitcoin for all sorts of things — a way to store value, make payments, or as a hedge against traditional finance. As long as it’s useful, it’ll be valuable.” According to Exploding Topics, there are 46 million unique Bitcoin wallet addresses. 

Companies like Tesla, Metaplanet, and Semler Scientific have added Bitcoin to their treasuries. MicroStrategy, which has 226,500 BTC in a stash worth around $13 billion, is leading the pack, according to Saylortracker.com. 

The Resilience of Bitcoin: Infrastructure, Adoption, and Regulatory Challenges

“Consider the massive ecosystem built around Bitcoin — businesses, projects, miners, exchanges, technologies, and more. The infrastructure is so well established, it’s not something that evaporates overnight,” Isaac said. “The Bitcoin network has also proven pretty resilient over its existence. How often have we heard that Bitcoin is dead, and then it comes back stronger than ever?” Isaac added that Bitcoin could reach zero through extreme regulations or a “coordinated global ban” that drives the price into the ground. 

He said it’s unlikely, though, given that it would be “difficult to envision and execute.” Some governments actively work with the industry to ensure its friendly jurisdiction. At least two countries have adopted Bitcoin as legal tender. El Salvador was the first in 2021, followed by the Central African Republic in 2022. In May 2023, the European Council adopted the first comprehensive legal framework for the industry. 

Bitcoin Will Likely Always Survive In One Form Or Another

Lyn Alden, an investment researcher and founder of Lyn Alden Investment Strategy, told Cointelegraph that for Bitcoin to reach $0 in our lifetimes, it would likely take some critical bug or exploit. Even then, she said it would likely live on through a surviving fork because it’s doubtful there is a “scenario where there is no functioning blockchain around and that the industry goes to zero.” 

“Thus far, it has been shown that even when blockchains are effectively dead in size and liquidity, they don’t go to zero, or at least they take a very long time to do so relative to the timeframe they’ve currently existed,” she said. “This is because, unlike a company, there is minimal overhead to keeping some basic lights on for a blockchain.” According to Alden, a greater risk to Bitcoin would be “stagnation,” which she sees as a high risk for most of the industry. 

Given that Bitcoin has been the dominant blockchain for 15 consecutive years, she said it has “graduated to that dominant protocol level, which likely gives it an extremely long lifetime of relevance.” 

If Bitcoin Hits Zero, The World Might Have Ended

Tony Sycamore, a market analyst for online brokerage platform IG, told Cointelegraph that the odds of Bitcoin going to $0 are very low but possible. Sycamore argued it would take an extreme event to topple the largest digital currency by market cap. “For example, if Bitcoin were outlawed by all governments worldwide or if the technology it is based upon proves to be less secure or stable than originally expected,” he explained. “In the event of a severe global economic recession or depression, it could also become worthless.” 

Brady Swenson, co-founder of Bitcoin platform Swan Bitcoin, said that if Bitcoin ever reached $0, the world might have experienced a “catastrophic event that set human civilization back centuries” — in which case, everyone would have much more significant concerns. Regardless, Swenson believes that whatever happens, there will always be believers, “the holders, who believe in Bitcoin and its ability to change the world by fixing the money,” creating a floor price well above $0. 

"There will also likely always be believers in particular Bitcoin who hold on despite massive price drops,” Swenson said. “In the long run, free market money and network protocols tend toward one. Bitcoin will be the larger market, and Bitcoin will be relegated to tiny niche use cases.”

A Tyrannical Government Could Steal All the Bitcoin, but It Won’t Hit $0

Governments need to be faster to create rules and regulations regarding the market. Most have not outlawed it but have not embraced it with open arms, either. Greg Magadini, director of derivatives at market intelligence firm Amberdata, told Cointelegraph that a more plausible scenario than Bitcoin going to zero is a tyrannical government trying to hoard it all. 

“It’s possible for Bitcoin to jurisdictionally transform from an asset to a liability given the wrong political environment, or [if it] becomes too risky to hold, even if the price is above $0 internationally,” he said. “Just look at how this was done historically, for example, Franklin D. Roosevelt’s 1933 Executive Order 6102, which required citizens of the US to give up their gold to the Federal Reserve.” 

Executive Order 6102 forbade the hoarding of gold by private citizens within the continental United States. “In the event of a severe global economic recession or depression, it could also become worthless.” Brady Swenson, co-founder of Bitcoin platform Swan Bitcoin, said that if Bitcoin ever reached $0, the world might have experienced a “catastrophic event that set human civilization back centuries,”  in which case, everyone would have much more significant concerns. 

Regardless, Swenson believes that whatever happens, there will always be believers, “the holders, who believe in Bitcoin and its ability to change the world by fixing the money,” creating a floor price well above $0. “There will also likely always be believers who hold on despite massive price drops,” Swenson said. “In the long run, free market money and network protocols tend toward one. Bitcoin will be the larger market, and will be relegated to tiny niche use cases.”

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