Bitcoin is the most profitable asset in the entire history of humanity. In March, BTC cost more than $61,000. However, critics believe that the cryptocurrency has no value, and one day BTC price will drop to zero.
We figured the current value of Bitcoin in dollars, analyzed what is behind the increase in the price of the very first cryptocurrency and how great the chances are that Bitcoin simply disappears.
Spoiler alert: Bitcoin will exist, if not forever, then definitely for a very long time!
What Is the Current Market Value of Bitcoin: Crypto-Skeptics Predictions
Bitcoin has been around for over 12 years. During this time, its price has grown from almost zero to $61,770 at its peak. The current market value of Bitcoin is also very high. Institutional investors and large companies have invested in the coin.
BTC is legalized at the state level in many countries, and the number of wallets in the Bitcoin network already exceeds 70 million. A complex infrastructure worth hundreds of billions of dollars has been built around the coin employing tens of thousands of people.
Despite this, Bitcoin critics believe that one day the price of the coin will return to zero. Such statements have been accompanying digital gold for 12 years. Among the critics’ main arguments: Bitcoin is a pyramid, and its demand is purely speculative.
What is the current value of Bitcoin? Well, last year, the investment genius and Berkshire Hathaway CEO, Warren Buffett, said:
Cryptocurrencies basically have no value, and they don’t produce anything. In terms of value: zero. I don’t have any cryptocurrency, and I never will.
Last December, the renowned investment consultant asset king Dennis Hartman said that Bitcoin was ‘utterly illogical’ and predicted that the digital asset would not compete with gold for a long time.
Hartmann also shared concerns that the value of BTC could one day drop to zero if central banks take certain actions. Although he wished Bitcoin investors all the best, he also said that he would prefer to own precious metals like gold instead of Bitcoin.
Scientists Predictions: Is Bitcoin Crash Real?
We decided to find out what scientists think about the likelihood of a complete crash of Bitcoin. So, in 2018, two economists at Yale University Yukun Liu and Aleh Tsyvinski, published a study ‘Risks and Profitability of Cryptocurrencies’. In this study, among other things, they examined the risk of Bitcoin collapsing to zero in the span of a day.
Using Bitcoin’s historical returns, the study authors found that the likelihood of an unspecified disaster dropping BTC to zero ranged from 0% to 1.3%. For comparison, the euro has a 0.009% chance of the same.
The conclusions of Liu and Tsyvinsky may be frightening. Still, you need to understand that Bitcoin was worth about $7,000 at the time, and many experts stated that the crypto market would never see the previous BTC highs of $20,000.
The current value of one Bitcoin is more than $57K, that is, the price of $100K does not seem so unreal. Moreover, institutional investors and large companies have invested in the asset. Therefore, the probability of the BTC dropping to zero, especially in the span of a day, tends to 0%.
Current Value of Bitcoin in Dollars: What Is Bitcoin Backed By?
Although the current value of Bitcoin in USD is more than $57K, another common argument that Bitcoin could crash to $0 is its lack of intrinsic value. The asset is actually not secured with anything and has the form of a code.
Usually, cryptocurrency supporters state that Bitcoin is backed by the power spent on its mining. But this is not true. The power consumed during mining only produces Bitcoin, and the coin cannot be exchanged for power. For example, it is very expensive to extract sand from the ocean floor, but it does not guarantee that there will be a buyer for it.
However, this does not mean that Bitcoin costs nothing. Yes, it is not backed by physical assets but fiat currencies either. The US dollar, for example, is supported by the US GDP, its national debt, and the commitment of the Federal Reserve System to provide a reasonable value for the currency.
So, what is the current value of Bitcoin? The value of BTC lies in the fact that this unique payment system allowed people to make transfers anywhere in the world freely and gave full control over their digital assets. And the technologies embedded in the Bitcoin blockchain network make it a trustless environment where users do not have to trust third parties, such as banks, to conduct safe transactions. All this makes Bitcoin more than just a code.
Bitcoin’s value also depends on the number of users. This can be described by Metcalfe’s Law, according to which the utility of a network is proportional to the number of its users.
Current Value of One Bitcoin: Can Bitcoin Depreciate?
The current value of 1 Bitcoin dropping to zero is very unlikely. For this to happen, one should wipe it out of existence — ban all BTC operations around the world, disable all miners, pools, and mining farms, and destroy all devices that store the history of the Bitcoin blockchain. It is one of the largest computer networks on earth. Therefore, it is almost impossible to destroy it.
We think that Bitcoin has long passed the stage when its price could fall to zero. This could only happen in the early years of the coin’s existence when only computer geeks knew about it. Now, this asset has become an essential part of the modern financial world.
Today, Bitcoin is more than just a cryptocurrency. It is a huge multibillion-dollar financial sector with a developed infrastructure supported by large companies, crypto exchange platforms, giant mining farms, and a multi-million audience of users worldwide.
Bitcoin must cease to be needed by anyone to fully depreciate. Today, it seems impossible. Moreover, over the following decades, and probably for several centuries, the demand for Bitcoin will remain stable.
Why Bitcoin Will Never Depreciate?
Whatever drawdowns and crypto-winters the coin experiences, the current value of Bitcoin will definitely not crash to zero. Moreover, it is likely to increase in price in the long term. There are fundamental reasons for this confidence.
Bitcoin was created to increase in price. There will never be more than 21 million bitcoins. Now 18.5 million have been mined, of which several million are lost forever. But even after the last Bitcoin is mined, the demand for this asset will likely increase, which means that its price will go up as well.
Mining new coins is a very energy-intensive process. While mining does not back Bitcoin, it does endow it with cost. The more expensive it costs to mine one Bitcoin, the higher the price at which miners will be willing to sell it.
It is a unique property and key advantage of Bitcoin. No one issues the cryptocurrency, and its blockchain network is not controlled by central authorities and is resistant to hacking.
In 2021, Bitcoin has already acquired the status of a legal asset in many developed countries. That is, no one is going to prohibit it. On the contrary, new laws are constantly adopted in these countries, introducing BTC into the legal field. There are thousands of companies working with Bitcoin that have built infrastructure for billions of dollars. It is a full-fledged sector of the economy, the participants of which are interested in maintaining the price of BTC and its growth.
Bitcoin is more and more integrated into the real economy, and millions of people use it every day. Payment services launch the ability to pay with Bitcoin and other popular cryptocurrencies, making them available to hundreds of millions of users worldwide. Even Mastercard plans to integrate cryptocurrencies into its payment infrastructure.
As was mentioned before, Bitcoin is the most profitable asset in the entire history of humanity. Thus, even if Bitcoin ceases to be a coin in demand, we are sure it will be valuable to collectors as a historical artifact.
Alistair Milne Will Repurchase It
Ultimately, entrepreneur and Bitcoin investor Alistair Milne will come to the rescue, who in July 2020 placed an order on the Bitfinex crypto exchange to buy 18.52 million BTCs in case it drops to $0.01. It seems unrealistic, taking into account the current value of BTC. By the way, what is the current market value of Bitcoin? Well, at the time of this writing, BTC costs $57,484.52. Still, Milne promised that Bitcoin would never fully depreciate.
Let’s repeat — the risk of a full BTC depreciation was eliminated many years ago. It had already experienced significant crashes several times, but this did not affect its overall uptrend.
Moreover, now all the coin fundamentals are better than ever — Bitcoin is stronger than ever! Currently, there is a much greater chance that BTC will cost more than a million dollars than that it will drop to at least a thousand.
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Could BTC price drop to zero? What do you guys think? Feel free to share your BTC price predictions in the comments below!