There’s a new bull in town and they don’t come bigger than this with the darling of innovative ETFs, Ark Invest, arguing bitcoin, ethereum, nfts, defi and the blockchain will transform the world in the next ten years to grab a market cap of $50 trillion, or about 25x from the current $1.7 trillion.
In giving a breakdown on how bitcoin will $28.5 trillion (pictured above), they say just the seizure resistant component where 5% of the wealth of high net worth individuals is invested in bitcoin, gives it a market cap of $4 trillion.
They point out bitcoin has risen from transferring $2.3 trillion in 2020, to $13.1 trillion in all of 2021, surpassing Visa’s transfers of $11 trillion.
Bitcoin could exceed $1 million by 2030, Ark says, a number that is about 30x from the current circa $37,000.
Ethereum to $100,000?
“Ethereum could displace many traditional financial services, and its native token, ether, could compete as global money.”
So says Ark in giving ethereum a market cap of $20 trillion by 2030, making it more than $100,000 per eth.
“If web3 proliferates, the monetization rate of online spending should approach that of offline spending by 2030,” they say, adding:
“Our research suggests that the monetization of time spent online will grow at a compound annual rate of 19% with Web3, but only 8% without Web3 during the next ten years.
Thanks to web3, annual online expenditures could reach $12.5 trillion in the next decade.”
The increasing interoperability of NFTs could enable the convergence of collecting, gaming, socializing, and investing, they say in creating a “new type of active entertainment.”
Because NFTs blur the line between consumption and entertainment, offering “entertainment and monetization simultaneously.”
Credible or Delusional?
Ten years is a very long time. You only need look back at the 90s or even the 2000s to see just how much has so slowly and unnoticeably changed.
Where this space is concerned, you only need look at the present to see what the future may bring, with Facebook ditching their own private blockchain Libra project as new hints arrive they may be going public blockchain.
It may perhaps be too soon to brag, but Zuk maybe has figured out there is no reason to antagonize what is now a fairly big space, or even try to compete with them, when you can court them and get them to do your bidding.
Self interest being what it is, and money the valuer of all things, the desire to be on the winning team can be irresistable.
When the Russian central bank thus tried again to say rara bitcoin, we ignored it because it has been obvious since 2017 that the Russian president, Vladimir Putin, would not allow them.
He perhaps knows better than most how to court power, and the power of code is of course currently pre-eminent.
The upgrade of finance thus, and the financialization of the internet over the next ten years, is perhaps a given.
For ultimately underneath the surface what is happening is the modernization of the paper financial system to bring it to the code system.
Taken to its conclusion that suggests all practical value measurement, in a long enough time-frame, will be on our blockchain.
Because paper requires trust. The public decentralized blockchain does not, to the same extent. That in itself makes much of the rest inevitable because humans love to cheat.
And so $50 trillion may look like a big number, and it is, it’s a huge number. But fundamentally and in a long enough time-frame, it will be all trillions or quadrillions because money is one thing where you do not want to have to trust.
The question then is more what part bitcoin or eth will have of all trillions. Stocks for example if they are tokenized and on the blockchain, would be $100 trillion but eth doesn’t have to equal their market cap just as it doesn’t of the tokens that already run on it with just tether for example at $100 billion while eth is about $300 billion.
So you’d have to do some calculations in regards to just how much eth would be needed in fees to run all this, and one proxy may be the profits of just the US banking system at $100 billion.
Profits, unlike revenue, are usually times 100, to give you a market cap of $10 trillion which would make eth itself about $100,000 per coin.
We remove cost savings from all the intermediaries, and then we add speculation as well as eth functions like acting as an exchange in say eth/uni, in addition to acting as a unit of account in transferring funds, and so you may still get that $100,000 coin for eth.
That’s in today’s money, but the Ark prediction is about the number 100,000, and so how much that would be in today’s money in 2030, is anyone’s guess.
The more complex analysis however is on whether ethereum can execute on the opportunities as from a number crunching perspective, one can see how these numbers can make sense, but from a more wholistic perspective in regards to whether they can deliver to such extent, it is more a maybe where raw technological capabilities are concerned, rather than wider aspects such as store of value.
Which is why eth is no where near $100,000, with it very much to be seen whether it can move in the direction where it can accommodate say the stock market through second layers or other solutions, or whether instead it will be different blockchains or whether indeed it will take quite a bit more than 2030 both for technical reasons and because such upgrades take time with 2050 maybe more realistic for eth $100,000 in today’s money, while in 2030 it may of course hit the number $100,000.
Source: https://www.trustnodes.com/2022/01/27/bitcoin-and-ethereum-will-50-trillion-says-ark-invest