Bitcoin’s giant move upward is far from done, according to tech investor and stock picker James Altucher.
According to Altucher, society has made major changes to its currency a few times in history: Gold replaced barter as a transactional currency; paper money replaced gold as a store of value; and bitcoin and other cryptocurrencies are going to replace paper money as a transactional currency.
Each type of currency solved problems of the prior generation of currency, he said in an interview with CNBC. Bitcoin solves the problem of infinite money printing, forgery, double-spending and anonymity, he said. Altucher owns bitcoin, ethereum, litecoin, zcash and filecoin.
Pointing to a demand-supply imbalance, Altucher predicts that bitcoin will top $1,000,000 per coin.
“There’s $200 billion in cryptocurrencies out there and over $200 trillion in demand for money — that’s the amount of paper currency andgold bullion in the world,” he said.
Altucher, founder and publisher of Choose Yourself Financial, a subscription-based financial publication cautions that 98 percent of cryptocurrencies are scams. But bitcoin and a few other cryptocurrencies are here to stay, he believes.
“This is the greatest tectonic shift in money and wealth that we will see in our lifetimes,” he said.
Here are his 10 predictions for cryptocurrencies:
- At least one country’s currency is likely to fail soon — likely Argentina or Venezuela. This will lead to mass adoption of bitcoin among that populace. That will in turn lead to bitcoin rising by more than $50,000 when it happens.
- Mainstream banks will accept bitcoin, and will start offering storage and software access. They will also create cryptocurrency derivatives — as the CME is about to start doing.
- Despite the optimism, there will be a massive wipeout, and 95 percent of the alt-coins out there will go away — just like the dot-com bust. The surviving coins will go up a ton. This will happen within next four-six months.
- The U.S. government will secretly start accumulating one of the smaller cryptocurrencies to make it easier for gray-area transactions with other countries. This has already started happening but will really start to ramp up in 2018.
- China will invest heavily in another cryptocurrency, but probably not bitcoin. China will want to have a cryptocurrency that is competitive with bitcoin, but under its centralized control. This will, in general, provide legitimacy to all cryptocurrencies.
- One big problem with cryptocurrencies now is their volatility. At least one — basecoin — will likely dramatically reduce that in 2018.
- More companies will pay freelancers with crypto, which will lead to calls for tax reform. There will need to be greater regressive sales taxes, which will ultimately require government cuts and eventually less power for national governments. This is a long-term prediction.
- In the same way the internet changed the monopolistic phone industry, crypto will change the monopolization of government-backed money.
- A new government organization will be created to analyze regulation on cryptocurrencies. This will, ironically, lead to a huge upswing in bitcoin and coins that provide actual utility.
- Thousands of crypto companies will be created and go public, but only a few will be massive successes.