Bitcoin's market cap could hit $1 trillion in 2021 as its growing reserve currency status drives adoption higher, a cryptocurrency expert says
- Bitcoin's market cap could hit a trillion dollars as early as 2021, according to
Blockchain.com's head of research.
- "My expectation is that
bitcoinwill become a trillion dollar asset as early as next year," Garrick Hileman, who is also a visiting fellow at the London School of Economics, told Business Insider.
- Although the 2020 bitcoin rally was largely driven by institutional investors, he expects to see continued buy-in more from retail and Wall Street investors going forward.
- The researcher expects the US to digitize the dollar, but not too soon as he said "the Fed is happy with the way the world is."
- Watch bitcoin trade live here.
Bitcoin's market cap could reach $1 trillion sometime in 2021 as investors take its reserve currency status more seriously, according to Garrick Hileman, head of research at
Major institutional players like Stanley Druckenmiller, BlackRock, Bill Miller, and Jack Dorsey have acknowledged that bitcoin is not only going away, but is becoming a reserve asset and validating the digital gold thesis, Hileman said.
Bitcoin has a current market cap of about $350 billion, while that of gold's stands at roughly $10 trillion. This week the
"My expectation is that bitcoin will become a trillion dollar asset as early as next year," the crypto researcher told Business Insider.
Blockchain.com observed a 39% growth in wallet creation year-to-date on its crypto exchange. That is about 17 million wallets created since December 2019.
Read more: The CIO of a new crypto fund that has returned 220% to investors this year explains why bitcoin topped $20,000 for the first time ever this week - and shares another digital currency set to become the 'asset of the year' in 2021
The exchange saw a broadening of adoption and ownership of
He noticed a lot of the recent price action was driven by institutional investors, based on transactions that occur on the chain, and is unlike the retail investor frenzy of 2017. On-chain demand and other metrics suggest that the 2020 rally was driven more by institutional hedge funds, family offices, and money managers.
Hileman expects to see continued buy-in from retail and Wall Street investors going forward, rather than corporates. That's because it is harder for bigger players to participate than professional investors who already have accounts and easy access to major exchanges, he explained.
For bitcoin's market cap to reach $1 trillion, it would have to hit a price of $54,000 per coin next year - a 130% rally from where it's at.
As for the US dollar, the researcher expects the world's most popular reserve currency to be digitized sometime in the next five years. "At this point, the Fed is still taking its time because the Fed is happy with the way the world is," he said.
The status quo is working well for the dollar because it is dominant through the SWIFT mechanism and the corresponding banking system, he said. The US government can also raise debt at attractive interest rates, supporting the dollar's status. But a competitive challenge lies in the crypto space and in the rise of stablecoins.
- Reliance Industries will be hosting its 45th AGM this month — all your need to know
- Great Freedom Festival deals on kitchen products—buy induction cooker, microwave oven, mixer grinder, and more at discount
- Best Amazon deals on large appliances - AC, TV, Fridge, Washing machine, Dishwasher
- Best deals on fashion and beauty during Amazon Great Freedom Festival
- Best deals on furniture items during the sale