BitGo Software Engineer Jameson Lopp revealed that if the seven-year trend of Bitcoin price continues, Bitcoin will be valued at around $250,000 by 2020.
Lopp calculated the seven-year trend of Bitcoin price based on daily value change. With the exception of 2014, which was affected by the downfall of now-defunct Mt. Gox, Bitcoin has continuously recorded positive daily value change since 2010.
Bitcoin average DAILY value change:— Jameson Lopp (@lopp) June 5, 2017
In the past three years, Bitcoin price has increased exponentially, surging by 0.09, 0.22 and 0.66 percent in 2015, 2016 and 2017 respectively on a daily basis. In 2017, Bitcoin price increased by 0.66 percent on a daily basis, as Bitcoin price surged from $980 to $2750 within a six-month period.
If Lopp’s Bitcoin daily gain since 2010 is considered, by 2020, Bitcoin price should reach $250,000. This, of course, assumes that Bitcoin price will increase at an average rate of 0.42 percent on a daily basis.
However, Lopp stated that the miracle of compound interest makes the $250,000 by 2020 calculation nonlinear.
“It's not linear due to the miracle of compound "interest." 0.42 percent of tomorrow's value is > 0.42 percent of today's value,” said Lopp.
As we reported, an increasing number of mainstream media outlets and analysts have started to compare Bitcoin and its growth to that of reserve currencies and major assets such as gold.
Most recently, ABC News, a national news service in Australia produced by the Australian Broadcasting Corporation, and The Wall Street Journal have been offering extensive coverage on Bitcoin price by comparing the cryptocurrency to the performance of the US dollar, euro, Japanese yen and British pound.
Alan Silbert, senior vice president at Capital One Healthcare and founder of BitPremier, revealed that the traditional Wall Street Journal newspaper demonstrated the growth chart of gold and Bitcoin on its front page as interest and demand toward Bitcoin have been on the rise.
If scaling issues of Bitcoin become resolved and more investor begin to purchase Bitcoin as both a digital currency and digital gold, it is possible for Bitcoin to grow at the predicted rate of Lopp. In fact, Xapo CEO Wences Casares shared that Business Insider CEO Henry Blodget recently claimed Bitcoin price could go up to $1 mln.