The Bitcoin drop was caused by a number of issues, the most notable one is the US government’s consideration of regulating cryptocurrencies. Other factors include government activities against cryptocurrencies around the world, as well as the current pandemic factor, which cannot be ruled out.
Long-term investors should not be concerned about Bitcoin’s ability to reach its full potential, according to Anthony Scaramucci, founder of SkyBridge Capital and former White House Communications Director.
Scaramucci told Michelle Makori, editor-in-chief of Kitco News, that the underlying value of Bitcoin is in its developing network.
“Fundamentally, you can value Bitcoin related to the network. Remember what Robert Metcalfe, the MIT professor, once said, the fax machine is probably worthless but 100 million of them is probably worth something. The network itself is worth something,” he said.
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Bitcoin to be Valuable Than Gold
He believes that the price of Bitcoin will eventually grow to the point where it will outperform gold in terms of market value.
Scaramucci says when it comes to a box-checking exercise about the store of value, Bitcoin checks more boxes than gold, but it’s still early. As a result, there will be some volatility. Because of all the technical qualities linked with Bitcoin, he believes it will be more valuable than gold when it matures.
In ten years, Bitcoin will have a greater market capitalization than gold. It took 5,000 years for gold to reach its current market value. Bitcoin will surpass that in less than 25 years.
The overall circulation market value of gold is estimated to be between $11 trillion and $13 trillion by most estimations.
“I ultimately think that Bitcoin will be worth half a million dollars and it takes four to five years. The ride will be rocky, but it will certainly be worth it,” he said.
Importantly, Scaramucci predicted that as Bitcoin usage grows, the user base will eventually reach more than a billion people around the world.
