I believe in 10–20 years 1 BTC=$300,000 and 1ETH=$22,000. Let me explain why using a comparison of Internet age vs the Blockchain age.
Early ‘90s
I look at the blockchain space as being in the same state as the internet was in early ‘90s.
Why is that? Because only a few of my friends have heard of Bitcoin and none of Ethereum. Because none of them have used anything in the crypto/blockchain space. And when I ask taxi drivers, or random people I meet I also get the same answers: yes, I vaguely heard of Bitcoin but they know nothing about smart contracts, ICOs, and they are not using anything in the crypto space, yet.
I believe history repeats itself. We can learn from the early years of the internet and internet/tech companies what is likely to happen to the blockchain space.
NASDAQ
I am looking at the NASDAQ and companies like Google, Amazon, Facebook, etc. to guide us on how the next few years, 10 years and 20 years will look like for the crypto space.
1. What we saw with the internet companies is that they didn’t entirely replace the existing business space. While Amazon has killed a few book stores and Netflix a few video rental companies, in large, car companies, General Electric, infrastructure, distribution, finance, etc. did not disappear and did not get replaced/destroyed. The internet and tech boom in the 90s and 2000s have maybe destroyed x% of the “old style businesses” where X<10% or 20%, but in large it has in fact added value. It created value, additively. I therefore expect that the blockchain companies and ways of doing business will not replace Google, Facebook, Amazon but may kill PayPal for example.
2. Second, how big will the blockchain economy get and how fast?
If you look as the Nasdaq data from here and here we see this chart and we can make calculation on the cumulative market cap of the NASDAQ companies.
Here is what I read in this chart:
a. It was created in 1977 with a value of 97.
b. It reached a high on March 10 2000 at 5,048.
c. It then dropped up to 1,314 on Aug 30, 2002. A drop of 73%.
d. It then took 13 years to make a new high again above 5048 around Jul 2015.
e. It is trading now at 6350 roughly.
And what I read by downloading the CSV file of the NASDAQ listed companies with their statistics from here.
f. The total market cap of the stock of the companies on NASDAQ today 1.11×10¹³ US Dollars. That’s 11.1 trillion USD, or 11,100 billion USD. Aka 11,100,000,000,000 USD.
If we assume the NASDAQ Composite is a good benchmark for Internet Age Companies we learn the following:
Conclusion
1. I expect the blockchain space to create value and not destroy much of existing internet and established businesses.
2. I expect in 20 years from now roughly the value of the blockchain cap (perhaps measured as the market cap of all coins together on www.coinmarketcap to be roughly in the 10 Trillion USD range.
3. If market cap = 11 trillion USD and Bitcoin is still 45% of the market cap, 1 BTC will be worth $298,958. That’s about 71x the present value.
4. If in the same way ETH continues to represent roughly 19% of the market 1 ETH will be worth $22,232. That’s 75x the present value.
5. I expect that there will be a rose period during which the crypto market cap will continue growing exponentially. This period will not be over until large existing internet companies will start joining the crypto space through their own tokens, ICOs, etc. A few months after they join the space I expect the entire crypto market to crash about 80% and for it to recover only 5–10 years later to the same high.
6. Therefore, these BTC and ETH values will probably be reached at least twice in the next 5–10 years.
7. If we compare also the number of Internet based companies with the number of crypto tokens/coin/altcoins that exist we will likely still see thousands or tens of thousands of ICOs.
8. And finally, right now the top 30–40 Internet companies have market caps in the billions. I expect the top 30–50 tokens/crypto tokens to have valuations in the $5bil + range.
A few closing remarks
· The NASDAQ composite only includes the US companies mostly and there are many more internet and tech companies in China, Europe, Japan, Latin America, Etc. Therefore, the absolute numbers used here are the lower end of any interval we can use to make assumptions.
· While history repeats itself it never does so perfectly. In my experience thing have accelerated over time. I expect the blockchain cycle to take much less time than the internet cycle took.
· It is of course unclear if the market cap of a given token/currency/altcoin is the best way to compare it to the market cap of the stock of an internet company.
· I believe that while BTC is a storage of value it should be better compared to Gold and ETH itself should instead be better compared with a valuable consumable commodity like Oil.
· I also believe that ETH has built in more use cases, function and therefore a higher demand while it has the same limited supply as BTC. I therefore also think ETH will probably beat the market cap of BTC over long time.
About the author
George Popescu, CEO of ICO Services Ltd, co-founder and CEO of Lampix
Crypto experience
· Advisor in 1st Blood ICO from the beginning in September 2016. Raised personally $2mil and contributed significantly to raising $5.8mil in less than 1 minute. 1st Blood Token market cap (August 2017) is approx. $55mil or about 10x ICO raise.
· CEO in Lampix PIX ICO in August 2017. From idea to ICO live in 40 days. Personally, managed all aspects form white paper, to marketing, sales, road show, technology, team, training, online presence, etc. Raised $14.2mil in 10 days from August 8th to August 9th.
· Serving as key advisor for AirFox ICO in August — September 2017. AirFox raised as of time of writing $6.5mil in pre-ICO already. ICO to start in October 2017.
· Chairman of board of advisers of Gatecoin, a crypto-exchange in Hong Kong.
· CEO and founder of ICO Services LTD, a company advising and providing turn key ICO services worldwide.
Non-Crypto experience
· Built and sold 5+ businesses, some of which had $20mil + in revenue
· Serial entrepreneur, build #1 fastest growing company in Boston in 2011, Boston Technologies. Boston Technologies was part of the Inc 500/5000 for 4 years in a row
· Founder and Editor in Chief of Lending Times. “Best Journalist Coverage” — Lending Industry Award, 2017
· Co-founder and CEO of Lampix. “Best AR/VR company” at SXSW Interactive festival among 50+ companies, March 2017.
· Co-founder and CEO of Backed ( www.backedinc.com), an online marketplace lender
· Masters of Science from MIT’s Media Lab
· Masters of Science in Nano sciences from Paris XI Univertisty
· Electrical Engineering and Computer Science engineer from Supelec, France