Crypto Investing
30 Nov 2021

Cryptocurrency Market Size, Share and Analysis- Forecast 2030

Deepan Datta

What will be Bitcoin worth in the next five years?

If we had asked the same question precisely five years back, the answer would have been quite mixed. Indeed, the market at that point was in a bubble state, so for users, it was difficult to predict the future of cryptocurrencies.

But, fast forward to 2021, in these five years, a lot has changed for the cryptocurrency market and everything in a positive way. Compared to five years back, users are now more confident about this asset class and its growth potential. 

And, the best thing, we now have access to more data points to accurately predict how the cryptocurrency market will evolve in the next 5 to 10 years.

Current Market Scenario

The global cryptocurrency market size is now close to $2.8 trillion in 2021, with Bitcoin leading the chart of most valuable cryptocurrencies. 

In the last five years, Bitcoin has indeed proved itself as a safe-haven asset, with the price rising from the sub $4,000 to over $60,000 level and showing its ability to hold and grow in value during uncertain economic conditions. 

The recent rise in Bitcoin prices was characterized by institutional investors’ investment, which gave retail investors confidence to start investing in the asset class. 

Also, the cryptocurrency market has expanded well, with the Bitcoin’s dominance level falling from near 70% level at the start of 2020 to 40%. During the same period, Ethereum market dominance has increased from sub 10% level to close to 20%, and altcoins dominance is currently over 40%, indicating a huge wealth creation possibility in the small coins. 

Source: coinmarketcap.com Market Dominance Percent of Different Coins

The cryptocurrency market has grown at a CAGR of 175% in the last five years, meaning an investment of ₹100 in cryptos made in 2016 is now worth ₹15,727. 

Cryptocurrency Market Outlook- 2030

The long term outlook of the cryptocurrency market remains positive, and the price of Bitcoin is expected to reach $1 million by the end of this decade. 

Yes, you read that right, $ 1 million by 2030, which is what the Bitcoin Stock-to-Flow model suggests. 

The Bitcoin Stock-to-Flow (S2F) model is a popular and much-recognized charting model to predict the price of Bitcoin. The S2F model applies to any scarce asset, like Gold and silver, etc. Let’s understand how the S2F model works.

Bitcoin Stock-to-Flow Model

The stock-to-flow model quantifies scarcity by measuring the total global supply of the asset divided by its annual production. Simplifying the thing, S2F predicts how much time it will take to replenish the stock of the asset at the current production rate. 

For instance, the S2F ratio of Gold is 62, which means at the current production rate, it will take at least 62 years to replenish the existing stock of Gold. 

The following table shows the S2F rate of precious metals.

Now, speaking about Bitcoin, its S2F ratio is 56 after the May 2020 halving, meaning it will take 56 years to match the existing supply of Bitcoin at the present flow rate. 

The next Bitcoin halving, scheduled in 2024, will cut the mining reward to 3.125 BTC from the current 6.25 BTC. It will increase Bitcoin’s S2F ratio to 113, making it scarcer than Gold and the scarcest asset on the planet. 

If you don’t know what Bitcoin Halving is, click here.

The Bitcoin S2F chart is developed by PlanB and showcases how Bitcoin is following the price trajectory marked in the chart per the halving events. According to the S2F chart, Bitcoin is slated to be priced at $1 million by the end of this decade, which translates to a total Bitcoin market cap of around $20 trillion. 

               source: https://stats.buybitcoinworldwide.com/stock-to-flow/

The 2028 Bitcoin halving is a significant event for the whole crypto community because, by that time, 98.43% of the total Bitcoin supply will be already mined. And, the remaining 1.57% or roughly 3,36,000 BTC, will be mined over the next 112 years.

Therefore, with decreasing supply rate and increasing adoption rate of Bitcoin, it will continue to rise in value over the long run. 

Bitcoin has the same importance in the crypto that Gold has in the traditional financial system.  

Going by the current market share data of different cryptocurrencies, the total market cap of the cryptocurrency market is expected to be around $50 trillion by the end of the decade, a CAGR of close to 42%. 

What Experts Have to Say on Bitcoin’s Price?

MicroStrategy CEO Michael Saylor, the famous Bitcoin evangelist, believes that the Bitcoin network could be valued as high as $100 trillion in the long term. 

“There’s a $500 trillion monetary planet and the outer layer is currency, then you’ve got stocks, bonds, real estate. There’s $10 trillion worth of Gold in there, $1 trillion of bitcoin in there. Bitcoin is going to flip Gold, and it’s going to subsume the entire gold market cap,”

“Then it’s going to subsume negative-yielding sovereign debt and other monetary indexes until it grows to $100 trillion. Once it gets to $10 trillion, its volatility will be dramatically less,” Saylor continued “As it marches toward $100 trillion, you’re going to see the growth rates fall, the volatility fall, and it’s going to be a stabilizing influence in the entire financial system of the 21st century.”

MicroStrategy is a cloud software firm and is the first publicly traded company in the world to invest in Bitcoin.

Thinking to invest in Bitcoins? Download the CoinSwitch Kuber App and start your investing journey starting at ₹100.

Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.

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Deepan Datta

Content Writer

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