Macroeconomics guru Raoul Pal is revealing why he thinks Bitcoin will climb to $1 million by 2026.
In a new interview, Pal says that the laws of supply and demand are working in Bitcoin’s favor, creating a feedback loop that’s attracting a larger number of institutional investors.
“Basically, supply is restricted, algorithmically restricted. So, it can never be changed, so you will always know what the supply is. So, then the question is, what is the demand?
What’s interesting about this is the more it goes up in price, the more the market cap goes up, the more financial institutions need to have it. Its price-performance also draws more interest.”
Pal says his price prediction for Bitcoin relies on the stock-to-flow model among other valuation modeling methods, all of which point to a $1 million Bitcoin by 2025-26.
“I’ve come at this in a number of different ways. One, is there’s somebody you can find on Twitter called Plan B… and he analyzes the stock-to-flow model which means you look at the amount of supply over time of an asset and how it affects price. It’s scarcity essentially.
It’s the same way that gold works, diamond works, things like that work… rare assets. And it becomes relatively predictable. That predictability would suggest that we might get somewhere like $1 million by 2025-26.
Then we can use the logarithmic scale and look at the price of Bitcoin on the logarithmic scale, it kind of gives you the same price predictions. Then, the other way of looking at it is looking at the total amounts of above ground supplies of gold and its price and then do the same for Bitcoin and you get something similar. So there’s a number of things that suggest that. But in a more sensible level, a million dollars is it going up 50 fold from here. Bitcoin is currently worth $300 billion in market cap… that’s about gold’s market cap… That’s not unreasonable.”
Pal says efforts to launch a Bitcoin exchange-traded fund will be key for Bitcoin’s growth moving forward, calling it the most attractive way for institutions to gain exposure to the leading cryptocurrency.
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