There have been a lot of bullish forecasts for the Bitcoin (BTC) price bandied around over the last 12 months.
These have ranged from US$20,000 per coin by the end of the year, to US$100,000 per coin within a few years, and all the way up to US$250,000 by 2022.
Well one analyst has outdone these forecasts with an incredibly bold prediction.
According to the Independent newspaper in the United Kingdom, John Pfeffer, a partner at UK-based Pfeffer Capital, has suggested that Bitcoin could one day be worth US$700,000 per coin.
Considering at present the Bitcoin price is fetching US$9,201 according to Coin Market Cap, this prediction implies a 75-fold return for the world's largest cryptocurrency.
Mr Pfeffer made the prediction at the renowned Sohn Investment Conference in New York this week and based it on his view that Bitcoin is the first ever viable candidate to replace gold.
He suggested that: "if bitcoin becomes the dominant non-sovereign store of value, it could be the new gold, or new reserve currency."
In his conservative scenario, this could lead to Bitcoin displacing approximately 50% of the world's foreign reserves, which Pfeffer believes would give it a market capitalisation of around US$6.4 trillion and price it at US$355,000 per coin.
However, in Pfeffer's bullish scenario Bitcoin would replace all foreign reserves, giving it a market capitalisation of US$12.7 trillion. Based on an estimated 18 million coins in circulation at that undetermined point in time, this would give each coin an approximate value of US$700,000.
Could this happen?
That's the US$700,000 question. While I would be surprised if Bitcoin were to replace gold, theoretically I think it has the potential to do so.
However, at this stage I think Bitcoin's technology is looking rather antiquated in comparison to some of its peers such as Ripple (XRP), Ethereum (ETH), and Bitcoin Cash (BCH). So, it would almost certainly need to be updated to launch to such a scale, or else it could lose out to one of these rivals.
Whatever does happen, though, it's certainly going to be an interesting ride over the next few years.
