The CEO of One River Asset Management Eric Peters says Bitcoin is likely to hit $500,000 in the long run. Peters whose firm also holds Bitcoin in excess of $1 billion says that the price could go so high because of Bitcoin’s limited supply of 21 million coins which is also the reason why it will potentially outperform gold.
He said gold’s supply is not limited and more of it is being discovered every day, unlike Bitcoin which can only have a maximum of 21 million in circulation.
“I think [Bitcoin] will be worth more than gold at some point because gold is not infinite. Gold continues to increase in terms of supply,” Peters said, according to a Bitcoin.com report.
Inflation and Recession Could Increase Bitcoin’s value
The U.S Fed has been printing U.S Dollars indiscriminately since 2020 to support its citizens when the COVID -19 pandemic arrived. Trillions of dollars have been printed and the new Biden administration plans to print even more money for social welfare. Peters cites this as one of the reasons why Bitcoin’s limited coins become more valuable as investors seek a store of value and a hedge against inflation which many have found in the top digital currency.
Gold has traditionally played this role as both a hedge against inflation and a store of value for decades. However, Bitcoin has in its ten years of existence become the favorite as it brings better investment returns and is more convenient to own. Last year, Bitcoin closed the year with over 300% gain while gold closed at a -0.3%.
Bitcoin’s market cap at the moment is close to $700 billion which is under 7% that of gold. At the current rate of growth, Peters says the price per Bitcoin could be in the range of $500,000 if its market cap was equal to that of gold.
Bitcoin will Become More Interesting
Cryptocurrencies like Bitcoin are built on blockchain technology which continues to evolve. In fact, many changes have been made on how Bitcoin works since its launch in 2009. Gold on the other hand remains the same with no improvement to how it is mined or stored. According to Peters, the technology that backs Bitcoin is what will make the asset to become more interesting as time passes.
Last year, demand for gold dropped by 14% while the same year was the best for Bitcoin yet as many mainstream corporations acquired the asset for the first time. Many key analysts have also predicted that money will flow from gold to Bitcoin in the future as Bitcoin becomes increasingly popular among investors. Notably, one of America’s leading banks JP Morgan says gold will suffer for years as institutional interest in Bitcoin continues to grow.