Macroeconomics guru Raoul Pal reveals why he predicts that by 2026, Bitcoin will rise to $1 million.
Pal says in a new interview that the supply and demand laws are working in favor of Bitcoin, building a feedback loop that attracts a more significant number of institutional investors.
â€œBasically, supply is restricted, algorithmically restricted. So, it can never be changed, so you will always know what the supply is. So, then the question is, what is the demand?
Whatâ€™s interesting about this is the more it goes up in price, the more the market cap goes up, the more financial institutions need to have it. Its price-performance also draws more interest.â€
â€œIâ€™ve come at this in a number of different ways. One, is thereâ€™s somebody you can find on Twitter called Plan Bâ€¦ and he analyzes the stock-to-flow model which means you look at the amount of supply over time of an asset and how it affects price. Itâ€™s scarcity essentially.
Itâ€™s the same way that gold works, diamond works, things like that workâ€¦ rare assets. And it becomes relatively predictable. That predictability would suggest that we might get somewhere like $1 million by 2025-26.
Then we can use the logarithmic scale and look at the price of Bitcoin on the logarithmic scale, it kind of gives you the same price predictions. Then, the other way of looking at it is looking at the total amounts of above ground supplies of gold and its price and then do the same for Bitcoin and you get something similar. So thereâ€™s a number of things that suggest that. But in a more sensible level, a million dollars is it going up 50 fold from here. Bitcoin is currently worth $300 billion in market capâ€¦ thatâ€™s about goldâ€™s market capâ€¦ Thatâ€™s not unreasonable.â€
Pal says attempts to introduce a Bitcoin exchange-traded fund would be crucial to the growth of Bitcoin going forward, calling it the most lucrative way to expose institutions to the leading cryptocurrency.