Prominent investor Tim Draper has predicted bitcoin will experience huge price gains over the next four years, claiming the cryptocurrency grow more than 25-fold by 2023.
The venture capitalist said he may have underestimated bitcoin when he previously predicted it will reach $250,000 (£201,000) – a figure he first forecast when bitcoin was worth around $5,000 in 2018.
A remarkable resurgence in 2019 means bitcoin is currently trading at just above $10,000, though it remains a long way off its record high from December 2017 of nearly $20,000.
Speaking to cryptocurrency news show Blocktv, Mr Draper said his previous price predictions had come true and that his latest one may even fall short of bitcoin’s eventual value.
“$250,000 means that bitcoin would then have about a 5% market share of the currency world and I think that may be understating the power of bitcoin,” he said.
“As it becomes easier for people to use… they’re going to make the decision that they like bitcoin better than any fiat because they know that their fiat will depreciate in value.”
Mr Draper made a name for himself through traditional investments in companies like Skype, Tesla and Twitch, but has since turned his attentions to bitcoin.
In 2014, he purchased 30,000 bitcoins that had been seized from criminals by the US Marshals, which were worth around $21 million at the time. At today’s rates, they are worth more than $300 million.
He has since been an outspoken advocate of the cryptocurrency, consistently claiming it represents the future of money.
Other financial analysts have also predicted that the price of bitcoin is set to increase, though their market projections have been far more modest.
Nigel Green, the CEO of financial consultancy firm DeVere Group said that bitcoin’s price will be boosted by the US Federal Reserve, which is expected to cut interest rates by around a quarter of a per cent this week..
“Bitcoin is likely to break out of its recent sideways trading pattern and be given a healthy boost by the Fed’s rate cut,” he told The Independent.
“This is because an interest rate cut reduces the incentive to keep the fiat currency. In addition, rate cuts typically lead to higher inflation, which reduces the purchasing power of traditional currencies, therefore making cryptocurrencies more attractive.”
Bitcoin price predictions range from $1 million to next to nothing (Getty Images)In August, Mr Green predicted that geopolitical instability would see bitcoin hit $15,000, as bitcoin was becoming a “flight-to safety” asset during times of market uncertainty.
He cited the ongoing trade war between the US and China, as well as the unpredictable outcomes of the Brexit crisis in the UK and Europe.
He stood by this forecast following the anticipated interest rate cuts, adding that cryptocurrencies will “continue to do well as the global economy slows and central banks ease monetary policies in response to this”.
Mr Green is joined by several other industry figures in predicting short-term gains, with some pointing to the record bitcoin mining rates in recent days acting as a key metric towards future gains.