Forex Market Overview & rough projection
Forex is the biggest market and its daily volume approximated $5,000B in 2016. The graphic below shows the evolution of Forex trading volume over 15 years.
The volume is increasing approximately by 4% annually for the last ten years.
Projection of this volume for the ten coming years using the same rate gives $7,625B as of 2027.
Bitcoin Daily Volume projection
On the other side, the transaction volume for BTC is exponentially increasing especially during the last three years and this trend might continue with even a steeper slope.
The graphic below shows historical BTC transaction volume in term of USD.
I approximated the transaction volume using a simple polynomial function (red one). I did not want to use complex forecasting models since this study aims at roughly estimating future price of BTC. Through the model above, I will be able to make projection for the coming years.
- Scenario 1: Forcasted daily volume of Bitcoin over the ten coming years shows almost $80B in dollar transactions which represents a small 1.05% (= $80B/$7,625B) from the global Forex market.
- Scenario 2: The first scenario forecast is very conservative since many analysts pushed this ratio to 5% = $380B.
Bitcoin Daily Volume projection
Over the years, Bitcoin supply will increase however it is very difficult to predict how mining power will improve in the future or mining technology will hit the wall. From the draw below, I expect the number of Bitcoin in circulation as of 2027 to be almost 20 Million.
I wanted to estimate the number of Bitcoin traded on a daily basis in 2027. I looked at the last three years to see the ratio of traded BTC over the total BTC supply as observed below.
Again, I will be conservative to say that the ratio of Bitcoin traded will be between 3% and 7%. Aggressive scenarios might be higher because none doubt about the popularity's increase of the cryptocurrencies and blockchain in general.
So, Bitcoin daily volume will be between 0.6M BTC to 1.6M BTC ( 20M BTC * [3% to 7%] ).
Price Of Bitcoin in 2027
The pricing will be based on the two scenarios listed above.
- Scenario 1: $80B / 0.6M BTC = $133K per BTC and if we have 1.6M BTC trading daily then the price of the Bitcoin will be $80B/1.6M BTC = $50K per BTC.
- Scenario 2: $380B / 0.6M BTC = $633K per BTC and if we have 1.6M BTC trading daily then the price of the Bitcoin will be $380B/1.6M BTC = $237K per BTC.
Finally, Bitcoin price is far from it is current level and I think it is worth buy it.
Disclaimer: This is not a buy recommendation. This is an analysis based on some objective hypothesis.
Nice work. Let's hope either scenario comes true for us HODLers. :)
Have you seen this story on OG trader masterluc?
https://cointelegraph.com/news/legendary-bitcoin-trader-masterluc-predicts-15000-bitcoin-this-year
He's notable for calling both BTC tops in 2013 well ahead of time, as well as forecasting the bear market from 2014-2016. He's predicting $15K BTC this year. Coming from him: that's very bullish, and if his past predictions are any indicator of his TA prowess, then we're all going to be happy campers.
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Thank you. I will share more frequently some analysis on cryptos.
I have read the article regrading $15K prediction. I trust TA on crypto because they are working properly. However, I am not sure that they can work for very long term.
I think fundamentals can provide better and fair projections
For Me BTC is a hold I hope the price will be closer to the second scenario :)
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I'm leery of long term forecasts based just on TA.
Perhaps he used TA, as well as trader/investor experience, as well as his "gut" or "intuition" to sense not only when it was oversold, but that the market would be terrible for BTC about 3 years.
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Intuition pays sometimes. Usually I dont trade above 15 min timeframe.
For long term investment I read too much about ICO and the team working behind ...
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...and this Harvard academic noted that there's an interesting correlation between Moore's Law and the price of Bitcoin: http://www.businessinsider.com/bitcoin-price-and-moores-law-2017-8
So around March 2018, BTC at the very least would be $8K if this pattern continues to hold.
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Very good analysis...thank you.
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thanks :)
do not hesitate to share it please
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