I believe it’s safer to ask ‘when’ at this point, rather than ‘if’ Bitcoin (BTC) will hit $1T in market capitalization. Though the price will need to roughly triple, bullish sentiment seems at an all-time high as some of the biggest skeptics on the cryptocurrency issue begin to re-evaluate their positions. Growth has been outstanding recently, with a slew of celebrity investments from notables including Maisie Williams from Game of Thrones. Additionally, bulls point to increasing support from the federal government which has allowed institutional money to begin to flow into the crypto space.
Republicans are quick to point to a group of Democrats who have opposed certain crypto-related issues in government recently, but perhaps they too easily dismiss the evidence that Democrats are pro-cryptocurrency. In addition to massive support from the left on the blockchain voting measures taken by the United States Postal Service, Speaker of the House Nancy Pelosi floated the possibility of a crypto-based stimulus payment system earlier this year during the discussions that led to the CARES Act.
Oddly, cryptocurrency is a hotly debated concept in certain programming circles to this day, but nonetheless the concept seems to have reached the tipping point in terms of support necessary to build something really remarkable. The Trump Administration itself has included little pro-crypto support, but many conservative Republicans in finance are becoming acutely aware of the possible value in cryptocurrency’s immediate future.
Bitcoin’s price recently tapped $18,980, only about seven hundred dollars shy of a new all-time high, but the pandemic and the political discussions still taking place about the election are dominating most of the airwaves. As a result, Bitcoin hasn’t been receiving as much press coverage as it did back in 2017. The current surge is most likely due to the increased legitimacy of the crypto asset now that the federal government has paved the way for institutional investment, but the fact that the total cryptocurrency market cap is over half a trillion dollars again is not as insignificant as it may appear.
As the election resolves and the American Government grinds back into gear, it is possible that more time will be available to the media to cover the price increases in the Bitcoin and altcoin markets. This could attract the attention of American retail investors again, and with another stimulus package on the horizon, their attention could be much more rewarding than it was back in 2017.
The Bull Case: 2020
If we allow ourselves to be bullish, the factors that come most readily to mind include the media coverage value as politics cools down as well as the ongoing Ethereum 2.0 (ETH2) rollout. Nobody seems to think it will go off without a hitch, but transaction prices that have been strangling DeFi may be substantially lower within the next six to twelve months. It is plausible that a smooth rollout could send the Ethereum market cap far closer to Bitcoin’s current post north of $300B. We’ve seen massive Bitcoin market cap increases with wall to wall media coverage before, but we may be in the midst of a far more stable ascension. If another spike does occur, however, it is possible that the price could stabilize 2-3x higher than it currently is on the far side of that event.
So if we allow ourselves maximum bullishness, it’s possible that the $1T market capitalization level could be just the starting point, even before December 31.
The Bear Case: 2021-22
Nobody wants to argue that the bull case is impossible, but perhaps it’s reasonable to evaluate it for being unlikely. If that’s the case, maybe the thing to do is to take all the same evidence into account and aim lower. The media may be quiet on the issue of Bitcoin today because they don’t think Bitcoin is important. That’s all but certain, in fact. Without a lavish media reception, the current bull market could become bearish. Interest could reverse course and begin to wane.
I never let myself go full-bear, but I think it’s plain to see that the bullish talk around the internet is just that: talk. Until we see the price explode, we’re unlikely to see widespread celebration of the new status being confirmed for crypto.
Parting Thoughts
Well, that’s the write-up. It’s important to note that my bearish case for the BTC market cap hitting $1T is only 2021 or 2022—I think there’s an undeniable momentum in crypto and I can’t wait to see how high it will go. The event that will set off the spike will be related to the price of Bitcoin, perhaps when it breaks its all-time high, but more likely when it doubles or triples its previous all-time high. When we see Bitcoin break the $1T market capitalization level, we’ll know it’s for real and perhaps the conversations will shift back toward cryptocurrency and lead to higher, more stable prices across the board and ultimately even wider adoption.
