Could Bitcoin Hit $200 Trillion Market Cap By 2032?

Last Updated February 22nd 2023

5 Min Read

Bitcoin has been an incredibly dominant player in the realm of digital currencies, serving as the preferred choice for a large portion of crypto enthusiasts. This has positioned Bitcoin as a reliable barometer for the overall crypto market in the general sense. However, it should be noted that Bitcoin's extreme volatility is also a distinguishing characteristic.

There's been a massive surge in the global crypto market as there has been an increase in the demand for cryptocurrencies. The market's value, which had previously exceeded $1 trillion, was regained due to high trading volumes. There was a widespread increase in purchases in the market, with Bitcoin being the top performer.

Hence, numerous theories exist concerning the future value of Bitcoin, with forecasts ranging from a complete crash to zero to an astronomical surge. However, one of the most frequently advocated and widely acknowledged perspectives is that Bitcoin has historically generated an average annual return of 2x. The optimal approach is to acquire and retain the cryptocurrency over time.

But To Which Extent Is This True?

According to Adam Back, the CEO and Co-Founder of Blockstream, a crypto mining giant, the calculations are accurate. By analyzing historical data from January 2013 through December 2022, a cumulative return of 1,200x over the decade can be computed.

This translates to an average return of 2.036x annually, which supports the common belief in the crypto world about twice the return in a year. Nonetheless, the company's co-founder went beyond tokenizing mining bonds and made an ambitious projection for Bitcoin's value.

Back further states, assuming this trend continues, the price of Bitcoin is expected to exceed $10 million. The market capitalization will surpass $200 trillion by the conclusion of the following two halving events, which will take approximately nine years.

At first glance, this appears to be outrageous, especially considering that the global economy, as measured by GDP, is only valued at $85 trillion. Therefore, suggesting the possibility of a $200 trillion market cap is a daring proposition.

Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Bitcoin's Market Capitalization So Far

On November 9, 2021, Bitcoin achieved the highest market cap of $1.28 trillion. The market capitalization of any cryptocurrency is calculated by multiplying its current market price by the total amount of tokens or coins presently in circulation.

As of May 1, 2013, Bitcoin had a market cap of $1.2 billion. It required around nine years from its inception date for it to reach the $100 billion threshold, which was accomplished on October 21, 2017, when its market capitalization rose to $100.1 billion.

Between Oct 2017 and Oct 2020, Bitcoin's market cap remained below $250 billion. However, from November 2020 to February 2021, the crypto witnessed a remarkable surge of 321%, causing its market capitalization to surpass the $1,000 billion mark briefly. It attained its peak market cap of $1.28 trillion and was valued at over $67k per bitcoin on November 9, 2021, albeit briefly.

How Is A $200 Trillion Bitcoin (BTC) Market Cap Possible?

early this year i was curious of the claim "bitcoin 2x's per year on average". it checks: the decade jan 2013 - dec 2022 #bitcoin went up 2.036x/year (1200x in a decade). if that continues we'll cross $10mil/BTC and $200 tril market cap by end of next 2 halvenings, about 9 years. pic.twitter.com/mqmO2SRdAv
— Adam Back (@adam3us) February 12, 2023

CEO Adam Back anticipates a substantial transfer of capital from conventional fiat-based financial assets to self-sovereign and digital assets like Bitcoin due to a significant global currency crisis. He believes this shift will be driven by a crisis that begins in the developing world, where "weak currencies" are prevalent.

The CEO further suggested that Bitcoin adoption could lead to sudden and intense hyperbitcoinization episodes, in which weak currencies are destroyed by rapid and widespread viral adoption, leading to hyperinflation and a crash of twenty lower-tier currencies. People tend to be practical and quickly adapt to such situations if they see fiat currencies rapidly losing value, resulting in a rush to safeguard their savings by investing in Bitcoin.

To achieve a market cap of an amount that's around the $100 trillion mark, Bitcoin doesn't need to absorb a large amount of money since it has low trading volumes and many investors hold it in cold storage. As Bitcoin gains momentum, it will become increasingly more work to find sellers.

He further adds that due to its volatility, Bitcoin carries the potential to significantly exceed the market caps of $100-300 trillion and then gradually stabilize over time. As a result, he expects that the people who bought the crypto at an average price compared to its future value will need more motivation to sell large amounts.

It could experience significant growth by creating financial products and services native to the Bitcoin ecosystem. Despite efforts to improve its scalability through technologies such as the lightning network, taproot, and stack network, there has been a surprisingly limited amount of progress in developing advanced financial infrastructure for Bitcoin.

According to Back, the development of technology in this area could fully unleash Bitcoin's potential as an asset. He proposes that more significant growth can be achieved by creating structured financial products, such as mortgages backed by real estate but with guaranteed interest payments in Bitcoin, and other products that make it easier for more people to use Bitcoin while matching their risk profiles.

This likely implies using sidechains as a compromise, further optimization of the Lightning Network, and exploration of other layer2s. It's essential to act quickly as technology development takes time to mature.

Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Crypto Twitter Users React To Strong Bitcoin Price Predictions

Despite Back's bold claims and predictions, others took a shot at his statements.

Miners seem to try and hodl as long as possible. Only selling to pay costs. No reason to assume they would have to sell all $2.25B by then unless ASIC supply & energy sources can keep up with hash power growing as fast as the marketcap.
— The Narrator (Fight Club) (@TheNarratorBTC) February 12, 2023

Some even went as far as questioning the mathematical capability of the Blockstream CEO.

Averages are easily tricky. I don't think that rate can continue. If you look at each bull run for BTC, the multiplying factor is less than the previous run, which would indicate a 2x per year average will continue to decrease since that is how averages work.
— KorbinDallas368 (@KDallas368) February 12, 2023

Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

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