Discussions about increases and decreases in Bitcoin (BTC) seem to be endless. Watchful observers of the digital currency market have carefully analyzed the BTC/USD pair. Speculation and price forecasts stimulate the imagination of every crypto-currency trader. Will the Bitcoin (BTC) price reach one million dollars? If so, how long will we have to wait for it, assuming a constant inflation rate?
Since bitcoin (BTC) is a so-called static resource, its value cannot fluctuate internally. This is due, among other things, to the fact that there is a limited and constant supply of 21 million coins. In this respect, Bitcoin (BTC) is a digital currency independent of the general economic situation. As calculations show, assuming the following conditions of no price increase and a constant inflation rate, the Bitcoin price (BTC) would have to wait until 2250 to reach the level of $1 million in order to reach the level of $1 million.
Since the dollar, as a traditional currency, is not constant in its supply, it constantly reacts to market changes. The FRD, the Federal Reserve, makes liquidity decisions every step of the way. As a result, funds are transferred to or outside the economy. As we know, the methods used in this area are constantly changing, but as a rule, the general flow of the economy is inflationary.
What exactly is the problem with inflation?
The main problem with inflation is that in the long run it destroys the value of assets. An example is when, as of January 1, 2020, we will deposit USD 1,000,000,000 in a bank. Assuming that the inflation rate this year will amount to 2%, the actual purchase value of such an amount will amount to 980 000 USD by 31 December 2020.
As you can easily guess, a loss maintained at this constant level would ultimately destroy the purchasing power of the funds. The described situation is therefore synonymous with the fact that the investor is constantly looking for new ways to obtain returns. This is necessary to maintain profitability.
Bitcoin’s Digital Restrictions (BTC) make it not immune to inflation.
Without an increase in supply, the BTC/USD pair increases with a fixed inflation rate. In other words, holding a Bitcoin (BTC) over a period of 12 months would generate a 2% increase in purchasing power. Keeping the traditional currency at the same time would result in a 2% decrease.
Is the forecast Bitcoin (BTC) price of $1 million realistic?
As all activities in the digital currency market increase, every bitcoin (BTC) gains intrinsic value. This makes it easy for those who keep this cryptocard to keep up with inflation.
The conclusion can be drawn from this: even with complete stagnation in the adoption process, Bitcoin (BTC) has a positive return graph. Assuming an upward trend, investments will be profitable. Is the price real? Undoubtedly, time will decide about it.