New Year’s Eve Predictions
Betting Against God With a 2030 Bitcoin Target
Before the calendar turns, I want to take my best shot at guessing where Bitcoin might be in 2030. I remember reading about Paul the Octopus, 1 the strange little creature who predicted the winners of major soccer matches with startling accuracy. It was pure silliness. The aquarium keepers would lower two flags into the tank with treats attached, and whichever treat Paul grabbed “predicted” the winner. (Or maybe the loser. I never actually figured out the rules.) But the funny part is this:Paul was right four times in a row. I doubt most soccer fans did a better job. So what’s my point? Simple.If we lowered different Bitcoin price predictions into Paul’s tank, he would probably be more accurate than me. But that does not mean I won’t try.
Earlier this year, I shared my Bitcoin, Ether, and Litecoin guesses in a Quora answer. 2But those answers were short. These Substack articles are where I will actually show my reasoning and walk through the logic behind each prediction. Just keep in mind that none of my reasoning guarantees I am even in the right ballpark. This is New Year’s, not prophecy.
Bitcoin’s Past
One of the first methods I use to judge the future price of Bitcoin is to look at its past performance. I know past performance does not guarantee future results, but it does give us a necessary starting point. For this part of my analysis, I look at Bitcoin’s compound annual growth rate over the last fifteen years. According to Investopedia, 3 CAGR is: “The compound annual growth rate isn’t a true return rate, but rather a representational figure. It is essentially a number that describes the rate at which an investment would have grown if it had grown at the same rate every year and the profits were reinvested at the end of each year.” In other words, CAGR is a way of turning Bitcoin’s wild roller coaster into a smooth line so we can talk about it without losing our minds.
If you bought Bitcoin in 2010 your CAGR would be about 191 percent assuming you bought BTC for $0.01. But hardly anyone bought at this price and has held until today. If you bought in 2019 at the low of the market you could have entered around $3,750 and enjoyed a CAGR of 70 percent. These are incredible gains, but notice that the CAGR slowed down from 191 percent to 70 percent when we start in 2019 instead of 2010. This shows that Bitcoin’s growth rate is slowing down over time, although anyone who bought in 2019 still experienced wonderful returns.
However, if you bought at the top of 2021 and sold today, your CAGR would be about 8 percent, roughly the same as the S&P 500. That alone shows how much Bitcoin’s CAGR swings depending on when you buy. Change the time frame and you can produce radically different CAGRs without changing the asset. My CAGR Choice For my prediction, I think Bitcoin will grow at roughly a 42 percent CAGR between now and 2030. For the price of $BTC to certainly hit $500K we need about 7-9% adoption.
Metcalf’s Law 4 says that a network’s value grows with the square of its number of users. So if Bitcoin adoption doubles, network value tends to increase by roughly 4x. This means we need adoption to increase by 2.5x over the next 4 years. Here is why I think it’s likely.
The dollar is weakening and will likely continue to experience above-normal inflation because of rising debt, money creation, and long-term fiscal mismanagement.
Most other fiat currencies are experiencing similar weakening to the US dollar.
The United States is finally improving its crypto laws, creating a far more Bitcoin-friendly environment than we had even two years ago. Better regulation encourages more institutional adoption and will also improve retail adoption.
Bitcoin’s technology and infrastructure keep improving, from Layer 2s to custody tools to exchange liquidity.
Every year it gets easier for normal people and institutions to adopt Bitcoin. Bitcoin is maturing, which naturally slows its growth rate. With global adoption already around 3 percent, there is still room to expand, but not at the explosive rates of the early years.
Bitcoin and other cryptocurrencies are easier and better for AI agents to adopt rather than traditional fiat.
Combining these factors makes a 42 percent CAGR a reasonable middle-ground expectation for a maturing, globally adopted, increasingly regulated asset.
How I Could Be Wrong
No prediction is perfect, and there are several real risks that could slow down or speed up Bitcoin’s adoption. The main existential risk to Bitcoin is quantum computing breaking Bitcoin’s private key system. Quantum computers are not currently strong enough to threaten Bitcoin, but if a breakthrough happened sooner than expected, the network would need to migrate to quantum-resistant cryptography, and that shift would come with trade-offs.
Government regulations can slow down Bitcoin’s growth. I will not be surprised if the EU continues to become more draconian in its approach to crypto in the coming years. As their systems deteriorate, they will get desperate to grab money wherever they can.
A competing coin that acts as a superior store of value could always launch. I think it is possible something new outperforms BTC, but I have my doubts. I very much doubt Central Bank Digital Currencies will slow down Bitcoin adoption. Even if CBDCs are successful, they still have the same problems that all fiat currencies contain. These currencies will continue to inflate and lose value. At the end of the day, I could simply be early, late, or wrong for reasons nobody can predict.
Conclusion
I am probably wrong. The price will most likely be wildly different from $500,000. But I tried, and I put it on the internet for everyone to laugh at me when I’m wrong. Even if I am wrong, making this prediction forces me to think clearly about Bitcoin’s long-term trajectory. But if I get the price right, I will brag about it every chance I get. See you in 2030!
Crypto Confidence Watchlist
I have been playing with Griffin AI for a while, but only the free version. It provides a variety of AI agents to help you track crypto price movements and offers a curated crypto news feed. It genuinely helps me cut down on research time, and the AI agents are just fun to use. Pretty cool.
Crypto Confidence School
If you are looking forward to the New Year and want to improve your crypto game, then you should check out my Crypto School. You can start with the free version, and if you want more help becoming competent with crypto tools, you can always upgrade to Premium.
Final Word
Happy New Years!
Tomorrow, is the first blank page of a 365 page book. Write a good one.
― Brad Paisley
DISCLAIMER: This article is for informational and educational purposes only and should not be construed as financial, investment, tax, or legal advice. The author is not a licensed financial advisor, and nothing in this article constitutes a recommendation to buy, sell, or hold any cryptocurrency, gold, or other asset. Cryptocurrency investments are highly volatile and risky, and you could lose all of your invested capital. Past performance does not guarantee future results. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions. The author operates a paid cryptocurrency education course and may hold positions in assets discussed.
https://en.wikipedia.org/wiki/Paul_the_Octopus
https://www.quora.com/How-much-are-Bitcoin-Litecoin-and-Ethereum-coins-predicted-to-be-worth-by-2020-2025-2030-etc/answer/Jared-Busby-1
https://www.investopedia.com/terms/c/cagr.asp
https://www.precisionot.com/metcalfes_law/