Long Term Cryptocurrency Predictions
This is an article that lays out my long term cryptocurrency predictions. This will take a macro approach to predicting the price of Bitcoin and the general size and success of crypto over the next 10 to 30 to even 100 years.
No one can predict the future, but my hope is to point out some big picture stats, and ideas then let you decide. I’ll also do my best to lay out major risks and obstacles that sit in crypto’s path as it moves into the future.
None of this should be considered investment advice. All of it is to get you thinking. Do your own research and also know, no one knows. Never bet the farm unless you’re willing to lose it completely.
That said, let’s dive into some long term cryptocurrency predictions.
My Long Term Cryptocurrency Predictions
The total cryptocurrency market cap as of late 2022 is roughly 1.25 Trillion dollars. According to the World Federation of Exchanges the total market cap of all publicly traded companies is 123 Trillion.
Using those two stats as rough indicators, crypto is more or less at 1% of the global (trade-able) economy. Taking a 20 to 30 year outlook, that percentage seems low.
Because that % seems low to me, that means that I believe crypto will grow at a pace faster than the general economy over the next 20-30 years. Once it hits a fair % equilibrium, crypto as a whole should grow at the pace of the economy.
Rather than give an exact % prediction on my end, let’s take a look at some arguments from crypto maxis (BTC/crypto will be 100% of everything in the future) and crypto skeptics (crypto will be worthless and not exist).
From there you can decide on what % makes sense to you.
Further Reading: The Best Crypto IRAs
Will Crypto Last Long Term?
A crypto skeptic would argue that Bitcoin and all cryptocurrency will go to 0 and not survive. They’ll cite things like government regulation, ponzi schemes or a million other arguments.
There is certainly a chance that crypto is pushed to the fringes and remains there, but barring the internet no longer existing or other apocalyptic scenarios, it is incredibly hard to imagine crypto or bitcoin becoming completely worthless or non-existent.
Here’s why 0% of the pie is extremely unlikely:
Too Strong of a Belief in an Ideal
Even if you are an insane skeptic and find everyone in the crypto world to be a kook, you have to admit there are enough kooks who believe in crypto too strongly. It almost serves as a religion – many people have already renounced citizenships, served life sentences and more all to maintain the sovereignty of bitcoin. Now, whether you agree with them or not doesn’t much matter. There will almost certainly always be 2 people who will trade a bitcoin for a loaf of bread.
No matter if Bitcoin becomes illegal, the anarchists will still cling to it, assign it value and trade it amongst themselves. This will always maintain at least some level of value for bitcoin.
Related Content: Gold vs Bitcoin Historical Comparisons
The Tech Doesn’t Have a Simple “Off Switch”
Furthermore, without getting too technical here – the way bitcoin, and many other crypto coins are designed – you simply can’t “shut them down”. You can make them illegal and erode a lot of faith. But even if the US, China and every major power declared crypto to be illegal, short of taking down the internet, crypto will exist.
The massive breakthrough of blockchain technology was to have this decentralized, uncensorable ledger. Yes, there are 51% attacks and other flaws, but ultimately you can always fork chains, shift resources and do other things to keep some version of a ‘decentralized, and outside the crontol of government’ version of money around. As long as 3 people decide to hide out in a cave and run 3 nodes you have a blockchain network.
With the advent of bitcoin, blockchain technology and uncensorable distributed ledger technology was born. There is no putting that cat back in the bag.
Further Reading: $ATOM – Cosmos Token Set For Revamp
Major Challenges Facing Crypto
Despite the fact that I don’t think crypto will go to 0, there are still some very formidable challenges facing crypto. Some of these challenges could severely hamper the price of crypto in the short and medium term.
The main challenges threatening crypto revolve around stable coins. If governments declare crypto illegal, major centralized players in a decentralized world, like USDC, could freeze assets. Or perhaps a centralized player like Tether doesn’t have the collateral to back it 1 to 1 and collapses. If/when these stablecoins collapse they will send shockwaves through the system because of…
Defi. With collateralized borrowing and lending and so many derivatives of derivatives, defi is kind of a house of cards. We’ve already seen cases of cascading liquidations. When one thing falls, it takes down another, which then takes down another and so on.
The interlacing nature of defi certainly turns a few pillars into targets.
If none of the above made that much sense to you, no worries. Basically it’s saying Crypto could and likely still will get rocked every couple years as it matures. I’m currently writing this in a down period where crypto is down about 60% in the last year.
BUT if we’re looking at this for a 20-100 year outlook, these massive draw downs are just (very) large bumps in a long term upward climb.
Will Cryptocurrency be the vast majority of the economic pie in the future?
On the other side of the coin, a crypto maxi will argue that soon everything that can be put on the blockchain will be put on the blockchain. They’ll cite things like transparency, speed, cost, ethos and more.
There are certainly advantages to the blockchain over a lot of traditional payment rails and systems. Thought a claim that blockchain and digital currencies will eat everything feels like too much.
However, I do think that crypto accounting for only 1% of the economy is too small and is set to rise.
Here are the reasons and ways I think crypto and blockchain systems will become more prominent in our global economy.
It’s Still So New & Misunderstood
Bitcoin is only coming up on 14 years old. In that time, it went from nothing, to basically worthless. Now, to having a half trillion market cap and spawning a 2 trillion industry.
Now you may say, “it’s growing too fast.” That could be true in the micro picture. Predicting the daily, monthly, or even yearly price swings of Bitcoin is nearly impossible. But whether it happened too fast or not, this meteoric rise has big players taking note.
Just recently Blackrock, the world’s largest asset manager, announced that they are dipping their toes into crypto. That’s a 10 Trillion dollar asset manager that is now going to start funneling some of those assets toward crypto. If Blackrock alone decides to devote 10% of their assets to crypto, that nearly doubles the crypto market cap.
While that’s unlikely, the point is that has more big money players move into the space it not only brings in their money but further legitimizes the space. Therefore, other major financial institutions, hedge funds, and pension funds will slowly start dipping their toes in the water.
Crypto is so new that it is open to very volatile short term ups and downs, but in the macro picture the “real big money” hasn’t even entered the picture. If/when it does, it will push the 1% number up quite a bit.
Digital and Global
In an increasingly digital and global economy it makes sense that more and more of our currencies and payment rails would be digital and global.
Before the advent of Bitcoin, provably verifiable, “un counterfeit-able” money wasn’t possible without the power of something like the US government to back and enforce it. Now, anyone can spin up a technically sound money (ie. you can’t forge it) with a few clicks. The trick is getting people to adopt it.
Changing World Order & Reserve Currencies
If you were an alien looking down on the world, or if you were thinking of the economy as a board game, which scenario makes more sense.
- This global economy filled with conflict and different ideas relies upon one controversial nation’s currency as the reserve token. That nation can decide to print more whenever it wants too. The controlling country can also choose to cut other countries off or freeze people’s assets whenever they see fit.
- There is a computer that no one person or country controls. That computer maintains a publicly verifiable balance of everyone’s holdings. It also has a publicly verifiable emissions schedule for any new currency issuance.
The second one seems like a more logical, fair game. You might find it crazy or fantastical that the US dollar will not forever hold strong as the world’s reserve currency, but you’re forgetting that this shift in world order has happened hundreds of times. That the US didn’t even really hold this power until post WW2. The system is new and fragile. Under 100 years old. A better alternative can, and likely will take over more market share.
Long Term Crypto Currency Predictions by Smart People
If you want some really well thought out essays about this by people much smarter than me check these out:
Here is an academic essay by Arthur Hayes about how and why Bitcoin and Gold will become/is already becoming the world’s reserve currency: https://entrepreneurshandbook.co/the-doom-loop-161a42bbcd50
If you want to leave crypto out of the equation and instead hear about the idea of the changing world order of reserve currencies check out this video. It is a summation from Ray Dalio of his book Principals for Dealing with a Changing World Order
For those of you who don’t know, Ray Dalio is the head of Bridgewater, also one of the largest hedge funds in the world. PS. The video is long, but well animated and kind of scary.
(This animated explainer video viewed nearly 20 million times. Not a lot of 43 minute videos can claim that)
Crypto & NFTs are More Natural to the Next Generation
The idea of Bitcoin or million dollar monkey NFTs may seem absurd to you, but to younger generations – they’re the norm. That’s the world they are growing up in.
They don’t want to invest in a dividend stock. 10x returns and being part of a movement and culture is what they’re after.
With time, more young people who grew up with bitcoin and NFTs their entire life will be acquiring wealth. Simultaneously, more skeptics will be dying off and passing their wealth off to the young folks. Who will use it to buy BTC
Time creates a natural shift in economic prowess by generation and that alone should push the adoption of crypto.
Crypto Powering Things Under The Hood
Finally, a lot of processes that currently run on centralized ledgers, or established companies doing business the old way will shift onto the blockchain.
For instance, Visa already announced it would settle transactions in USDC. People are looking into using blockchains to underpin all of the market making and trading that goes on in the traditional stock market.
These changes will likely mean nothing to the everyday user’s experience. They’ll still just swipe their credit card or purchasing a stock through Bank of America. It will all happen under the hood. But that will shift more attention and resources (particularly from major players) toward blockchains and cryptos.
Bitcoin vs Ethereum vs Others
If you’re convinced of a bullish long term cryptocurrency prediction, but unsure what coins to pick – let’s simplify that as well.
A lot of what I talked about will effect different coins, or spawn new coins that don’t exist yet. Crypto as an extremely fast moving market.
However, as of now, most of it follows the movement of bitcoin. As more money shifts into the crypto space, that will inevitably benefit the OG of bitcoin. Bitcoin is established, it has it’s use case as digital gold. If any existing crypto is to be adopted as a reserve currency, bitcoin is the one.
As for Ethereum, there is perhaps more upside than bitcoin, but also more risk. Ethereum is very much on track to becoming the world’s decentralized computation layer. Things like the stock market, national identities, gaming and more may all wind up running on Ethereum. That would be huge. But at the same time, when you are trying to do more things – there are more risks and more competitors.
If you are investing in crypto with a very long term view and you don’t want to manage things day to day and worry about the temporary dips, perhaps a tax advantageous IRA with some sort of split between 50/50 BTC/ETH to 80/20 BTC eth is the way to go.
Again, no one knows. There will be hundreds of 100x opportunities and failures in both directions. But to set it, forget it and “hodl” – I’d take those too and let it ride.
How to Play a Bullish Long Term Cryptocurrency Predictions
If your long term cryptocurrency prediction is that it is here to stay and grow, you may want to use a tax advantageous structure to invest in crypto for the long term. In the US an IRA is a fantastic way of investing long term and capturing excellent tax benefits.
You can set up a crypto roth IRA and not pay capital gains tax on long term holdings. This equates to massive savings when you go to withdraw. You would save roughly 20% or more on all gains made from the appreciation on Crypto.
Again, don’t bet the farm on this, but let’s give a conservative example. If you have 100k in an IRA. You can roll over 10k of that into a crypto IRA.
Maybe you lose all that money, or maybe it does a 10x and you pay no taxes on withdrawals once you reach 59.5.
Personally, I think the chances of crypto becoming more prevalent, and those gains being passed onto the biggest coins, is more likely than crypto disappearing. None of this is investment advice, but it is presenting a risk I’m willing to take with a portion of my long term savings.
If you want to learn more about alto crypto IRA you can read our full review here
Or check out their website and get started for as little as $10. It simply connects to your coinbase account and you start trading through their platform with IRA tax advantages.
Long Term Cryptocurrency Predictions Conclusion
Crypto is new. New brings a lot fo volatility and a lot of risk. However, new brings a lot of upside. Given the way that blockchians are structured and the toe hold they have already created within the economy and societal belief systems, crypto is here to stay.
In my opinion, it is here to stay and will only grow in popularity due to the reasons outlined in this article.
Thanks for reading this long term cryptocurrency prediction piece and whatever you decide, I wish you nothing but the best success.
