- Adam Back predicts Bitcoin could reach $700,000 within 1-2 years based on upcoming halving reducing supply and increasing institutional demand
- Key driver is Bitcoin flipping gold’s market cap if investors start selling some gold to buy Bitcoin as digital store of value
- Major banks urging for Bitcoin ETFs shows its increasing status as digital gold; if they allocate even small % of gold to Bitcoin, price could surge
Adam Back, the chief of Blockstream and creator of the Bitcoin Lightning Network, recently made a bold prediction that the price of Bitcoin could reach $700,000 within the next year or two.
Back’s Reasoning Behind the Prediction
Back’s prediction is based on the upcoming Bitcoin halving in April 2023. Halvings occur every 4 years and reduce the rate at which new Bitcoins are generated by 50%. Historically, halvings have preceded significant bull markets for Bitcoin.
As the supply of new Bitcoins decreases due to the halving, but demand remains steady or increases, the price of Bitcoin tends to surge upwards. Back believes the decreasing supply coupled with increasing institutional demand could propel Bitcoin to flip gold’s market capitalization within 1-2 years.
Flipping Gold is the Key
Once Bitcoin flips gold, Back believes its price could reach $700,000. He argues some investors may start to sell some gold holdings to buy Bitcoin as it gains status as a digital store of value. Bitcoin reaching the same market cap as gold implies a potential price of $700,000 per coin.
Bitcoin as Digital Gold
Back stresses Bitcoin is a digital version of gold. Major banks and fund managers like BlackRock and Fidelity have been urging for Bitcoin spot ETFs, showing Bitcoin’s increasing status as digital gold. If these institutions allocate even a small portion of their gold holdings to Bitcoin, the price could surge dramatically upwards.
Conclusion
While a $700,000 Bitcoin price may seem farfetched to some, Back believes the upcoming halving coupled with increasing institutional demand could propel Bitcoin to new heights. If Bitcoin does flip gold’s market cap, his prediction is reasonable based on simple supply and demand economics. The next year or two will prove whether Bitcoin can continue on its trajectory towards becoming “digital gold” and mainstream adoption.
