Bitcoin market capitalization can reach $200t in 9 years, says Blockstream co-founder

On Feb 12, 2023

Adam Back, the co-founder of Blockstream, thinks bitcoin (BTC) can rally to $10m, driving its market capitalization to over $200t in the next nine years.

BTC can reach $200t in the next nine years

In a Twitter thread on Feb. 12, Adam explained that this valuation could be reached if BTC continues expanding at a 2X rate in the next nine years. Within this time frame, the bitcoin network would have halved its mining rewards two times.

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

Between January 2013 and December 2022, Adam observes that the price of bitcoin has been doubling per year in a pump that has seen prices roar 1200X. This is despite the prices fluctuating in a boom and bust cycle, which eventually saw BTC expand to over $69,000 at the peak of the bull cycle in 2021. In 2022, the crypto market saw a coin price dump across the board. At the depth of last year’s winter, BTC prices had more than halved, sinking to as low as $15,300 following the fallout of CeFi platforms, including FTX.

Should bitcoin prices continue expanding as they were in the last ten years, Adam explained, it would be possible for prices to reach the $200t mark Hal Finney predicted. Hal Finney was among the first after Satoshi to run a bitcoin node in early January 2009 and remained confident that BTC would be successful considering its finite number.

While Adam acknowledged that this valuation is “a lot”, it is, nonetheless, feasible. The only concern he noted was that growth could taper as more bitcoin derivatives are introduced. In his view, the more derivative products like bitcoin ETFs, ETPs, and futures, the more liquid the coin will become. Subsequently, the coin’s volatility will reduce due to the increased liquidity depth.

Bitcoin HODLers are essential to volatility

He also banks on rapid adoption due to hyberbitcoinization to propel the coin’s valuation. Per his analysis, bitcoin doesn’t have to absorb $100t in value for its market capitalization to reach $200t or better. This is because BTC’s liquidity is thin, and there are HODLers to consider. Moreover, with hyberbitcoinization, it will be harder for people to sell their stash, impacting liquidity and, therefore, feeding on volatility.

Going forward, Adam said he would be watching closely how BTC prices unfold while also keeping tabs on adoption. The more users have custody of their coins, the better it will get for BTC volatility and, thus, price.

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