According to ARK Investment Management LLC, the price of one Bitcoin (BTC), could surpass $1 million by 2030. According to the report, Bitcoin mining encourages and also uses electricity from renewable carbon-free resources.
The $1 million Landmark
According to the report, Bitcoin market participants are becoming more mature and are focusing on the long-term. According to last year’s data 13.5 million BTC is held by long-term investors. More than 500,000 addresses show long-term holding behavior. The report stated that these holdings reached an all-time high of 13.5 million BTC in 2021.
In 2021, Bitcoin’s cumulative transaction volume grew by 463 percent. Bitcoin’s annual settlement volume has exceeded Visa’s payments volume. This means that Bitcoin is gaining market share as a Global Settlement Network. Bitcoin’s cumulative transaction volume for 2020 was $2.3 trillion. This compares to Visa’s $12.1 billion in 2021.
Further, the report noted that Bitcoin is increasingly attractive to institutional investors. As of November 2021, 8 percent of Bitcoin’s supply was held by exchange-traded products, companies and countries.
El Salvador was the first country to allow consumers to use cryptocurrency in all transactions. In September 2021, the country’s Bitcoin wallet Chivo was used by 3.8 million people. This suggests that 84 percent of eligible citizens have adopted the cryptocurrency. According to the report, Chivo was processing $2 million per day in remittances as of October 2021.
This account accounted for approximately 12 percent of El Salvador’s $6 Billion annual remittances, and more than 2% of the country’s GDP. It also stated that more people in Central America have Bitcoin wallets than traditional banks. The International Monetary Fund’s executive board recently urged El Salvador not to legalize Bitcoin due to financial liabilities and risks.
According to the research report, Bitcoin miners could be energy buyers and incentivize new and more efficient forms energy generation. If Bitcoin mining has an impact on the utility grid, energy sources such as solar and wind could be used to meet more of the grid’s demand.
According to the report, energy asset owners could become bitcoin miners themselves and that adding Bitcoin mining to the toolboxes of power developers would increase the addressable market for intermittent and renewable power sources.
Many countries, including China, Kazakhstan, and Kosovo, have taken measures to stop crypto mining because of pressure on energy resources.
Current Situation Uncertain
Although energy consumption by crypto miners in India is not a problem, there are over 10 million crypto investors. India is currently working on regulations for cryptocurrencies. The situation is unclear at the moment. A number of regulators in the UK and Singapore have also tightened regulations on crypto-asset promotion. This is leading to a decline in cryptocurrency markets.
Bitcoin traded at $36,000 on Thursday, January 27 after having lost approximately half of its value at $67,734 in November. According to data from coinmarketcap.com, BTC has dropped more than 14 percent in the past seven days.