A new report from a crypto research group suggests that the price of Bitcoin could approach $400,000 in the next ten years, with altcoins following its bullish example.
According to the June 2020 edition of the Crypto Research Report, researchers predicted the price of Bitcoin (BTC) and other altcoins — Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), and Stellar (XLM) — would get a huge surge before 2025, which may continue for at least five years.
“We believe that Bitcoin is still at the very start of its adoption curve,” the report states. “The price of $7,200 at the end of 2019 suggests that Bitcoin has penetrated less than 0.44% of its total addressable markets [worth $212 trillion]. If this penetration manages to reach 10%, its non-discounted utility price should reach nearly $400,000.”
Source: Crypto Research Report
That would mean a price increase of more than 4,000% for BTC by 2030, but ETH, LTC, and BCH are also looking bullish in this scenario, with surges of roughly 1,600%, 5,000%, and 5,400%, respectively. However, XLM would see the largest increase: more than 11,000% from $0.07 to $7.81.
The Liechtenstein-based research group analyzed cryptocurrencies based on their target addressable market (TAM), a metric used “to estimate a cryptoasset’s implied future price.” According to the report, TAMs for cryptocurrencies include remittance, tax evasion, offshore accounts, store of value, online transactions, micropayments, crypto trading, gaming, online gambling, consumer loans, reserve currency, and others.
On-chain velocity decreasing, off-chain increasing
The report also observed on- and off-chain velocity metrics for altcoins and concluded that the “growth in the number of speculative transactions on exchanges is faster than growth of utility transactions to buy goods and services.”
“On-chain velocity” is a metric measured by transactions on a blockchain, while “off-chain velocity” is determined by trading activity on crypto exchanges. When analyzing Bitcoin, the researchers noted the price of the cryptocurrency and its activity on exchanges both increased at roughly the same time:
Source: Crypto Research Report
“If cryptocurrencies gain adoption for long-term hoarding purposes or for short-term spending on speculation or coffees, the price of crypto assets will go up,” the Crypto Research Report stated. “High velocity on-chain and low velocity off-chain suggests that crypto assets are becoming increasingly used for speculation and not for store of value.”
The September edition of the Crypto Research Report will be distributed on Cointelegraph.