The suspenseful US presidential election is nearing its peak, with Democrat Joe Biden reaching closer to the needed 270 votes, passing the lead over President Trump. While all the action is happening in the political world, Bitcoin is experiencing a massive rally. The world’s first cryptocurrency with the largest market capitalization reached $287.9 B yesterday, while Bitcoin price nearing $16,000, the highest since January 2018. 

The June 2020 edition of the Crypto Research Report (CRR) elaborated Bitcoin price predictions along with few other cryptocurrencies starting from the year 2020 till 2033. The famous model, “equation of exchange” was used as the main method in forecasting future crypto prices. As the report predicts can Bitcoin reach $20k by 2020 and achieve $395K by 2033?

“The equation of exchange model relies on the theory that the value of each cryptocurrency should be directly correlated with the dollar volume of the economy it supports,” the report states. 

The report further elaborates, Four types of crypto coins: 

  1. Store of value: This type of coin can be defined, as ” distributed ledger technology that can be used to securely store value over time.” 
  2. Utility coin: “Utility coins and tokens that enable smart contracts are considered second-generation cryptocurrencies.”
  3. Stable coins: These are the 3rd generation of cryptocurrencies. ” Stablecoins are normally ERC-20 tokens built on top of Ethereum’s blockchain that maintain relatively stable purchasing power over time in terms of real goods and services in the economy.” 
  4. Privacy coins: “Privacy coins are an offshoot of the first-generation cryptocurrencies.” 
Types of coins (Source: Crypto Research Report June 2020)

The research group analyzed cryptocurrencies based on their target addressable market also known as TAM.

“The absolute valuation approach is inspired by Mill’s equation of exchange later formulated by Irving Fisher.4 In this model, the percentage of the total addressable market (TAM) can be used to estimate a crypto asset’s implied future price,” the research team described in the report. 

Valuation Results 

After looking into all the variables and addressable markets, the research team utility price estimation for each assessed cryptocurrencies. Estimations are done on a non-discounted basis and with either bearish or moderate market penetration assumptions, the report elaborates. 

Price predictions for Bitcoin, Bitcoin Cash, Ethereum, Litecoin & Stellar (Source: Crypto Research Report June 2020)

At the time of the writing, Bitcoin price is hovering at $15, 500 while Ethereum passing $450. The research also indicates that there are more than 40 million crypto users globally. This number of cryptocurrency users in a country positively correlated to the country’s GDP per capita. The higher the GDP of a country merrier the adaptation results are, compared to lower GDP countries. You can download the full version of CCR from here.

What are your thoughts on this price prediction model? Can Bitcoin achieve set targets by each year? Leave a comment in the comments section below.