So far in 2022, the bitcoin price is trading in a narrow range around the $30,000 level, down more than 55% from its peak of close to $70,000 in November. According to Mike Novogratz, founder and CEO of digital asset investment firm Galaxy Digital, it’s going to be more of the same for the short-term. But by 2027, bitcoin could very well be trading in a class of its own.
Investors have been sorely disappointed as bitcoin has failed to act as the inflationary hedge it was designed to be amid soaring consumer prices and rising interest rates. Instead, bitcoin has been carrying the growth-asset mantle, and investors have been fleeing anything that looks like risk in droves.
While nobody said that crypto investing would be a walk in the park, it can be difficult to stomach the volatility.
However, for investors who are willing to zoom out through a wider lens, the glass appears to be half full. Galaxy Digital’s Novogratz is often the voice of reason in the crypto markets. As a former hedge fund trader on Wall Street, he can see the forest from the trees. Novogratz, who uses bitcoin adoption as a key driver of the price, provided some perspective that should pique the interest of long-term investors. He told Bloomberg,
“Five years out, if bitcoin’s not at $500,000, I’m wrong on the adoption cycle.”
Novogratz described an accelerating adoption cycle in which the leading cryptocurrency grew faster than the internet in its heyday of the 1990s. As a result, he sees it “going viral everywhere,” from the four corners of the earth to financial products like 401(k) plans, all are jumping on the crypto bandwagon. In the meantime, however, investors will need to be patient. Novogratz says the bitcoin price will remain stuck in a tight trading range of $30,000-$50,000 in 2022.
Novogratz isn’t the only one with a bullish long-term outlook on the bitcoin price. Dan Held, director of growth marketing at crypto exchange Kraken, reminds investors that in the grand scheme of things, it really won’t matter if they bought bitcoin at $30,000 or $60,000, saying, “The most important thing is that you bought.”
PC inventor and Apple co-founder Steve Wozniak, meanwhile, expects that based on interest in the flagship cryptocurrency, the bitcoin price is headed for $100,000.
There are signs of crypto adoption everywhere you look, a significant catalyst for the bitcoin price. According to a report from Traders of Crypto, the three sectors of the economy leading the way for crypto adoption include travel, e-commerce, and food/beverages.
The Traders of Crypto suggest that while many people have found crypto “opaque” and “difficult to understand,” major companies have moved to accept leading cryptos as a form of payment, which is thrusting digital assets more into the financial mainstream. For example, fast-food giants Burger King, McDonald’s, and KFC have all been integrating crypto payments, mainly in Europe, Latin America, and Canada.
In addition to restaurants, some universities are taking partial tuition in crypto, pro-sports are letting fans pay for merchandise in crypto, and travelers can pay the hotel bill with bitcoin using Expedia. Some airlines are also supporting crypto payments.
Cities, states, and countries are also lining up to be the first ones to adopt crypto-friendly legislation. In Austin, Texas, Mayor Steve Adler has vowed to support cryptocurrency and blockchain technology innovation, pledging to “turn the promises…into reality.”
In New York, Mayor Eric Adams, famous for taking his first three paychecks in crypto, is advising millennials and Gen Zers to direct $10 into bitcoin. Mayor Adams took a haircut in his compensation due to the crypto market downdraft, but he appears to have his eye on the prize. Bitcoin reached a peak of close to $70,000 in November.
Crypto adoption is a global phenomenon. Ukrainian President Volodymyr Zelenskyy, while under attack from Russia, has just added his signature to a law on virtual assets, making cryptocurrencies legal in the war-torn country. The new law makes cryptocurrency exchanges legal and clears banks to keep accounts for crypto companies. Ukraine has been accepting crypto donations since Russia’s attacks began, having amassed $50 million in a week with a target of $100 million, all of which is helping the country to buy items for soldiers.
The signs are all pointing toward greater crypto adoption, which if Novogratz is right will potentially lead to a much higher bitcoin price over the long term.
Disclosure: The author is not a licensed or registered investment adviser or broker/dealer. They are not providing you with individual investment advice. Please consult with a licensed investment professional before you invest your money.
Tim Thomas has no positions in the stocks, ETFs, mutual funds, forex, cryptocurrencies, or commodities mentioned.
At the time of writing, neither Tim Thomas nor Smart Bitcoin Buyer / Timothy Thomas Limited hold positions in the cryptocurrencies mentioned.
Featured image credit: Upslash.