In 2014, venture capitalist and inspiring entrepreneur, Tim Draper claimed Bitcoin would soar to $10,000 in three years. By December 2017, it had topped that by rising to a staggering all-time high of $19,783.
Now, coinciding with the publication his new book, How To Be The Start Up Hero: A Guide and Textbook for Entrepreneurs and Aspiring Entrepreneurs, he has doubled down on his original prediction.
“I didn’t want to make any predictions after that for a long time because I wanted to let the dust settle,” Draper said. “Yet last month I thought that it was time for another prediction, while introducing my new book.”
He added: “The predication that led me to come up with $10,000 by 2017 was based on the idea that Bitcoin was going to be easy enough to use in the future and that people would be able to start trading with it and using it as a store of value. That is why I invested in Bitcoin.”
His prediction that Bitcoin will rise to $200,000 is based on a belief that cryptocurrencies will dominate and take the greater share of the financial markets, while fiat currencies will eventually play second fiddle to the major decentralised currencies.
“Now, I think people are going to be able to spend cryptocurrencies, like Bitcoin, in mainstream situations,” Draper added. “Cryptocurrencies will eventually replace credit cards and will be something you can access on your phone. I actually think cryptocurrency will replace fiat currencies entirely.
“For instance, right now there is about $80 trillion worth of fiat currency in the world. I believe that cryptocurrencies will expand that market. I think that cryptocurrencies will eventually grow to maybe $100 trillion and fiat currencies will fall from $80 trillion to $30 trillion.”
Talking to Forbes contributor, Rachel Wolfson, Draper added: “I predicted that Bitcoin might end up with a 20% to 30% market share. I sketched that out and I think the asymptote is somewhere around $130 trillion, but only maybe $100 trillion would be cryptocurrency and 20% of that would be Bitcoin. However, it would take 10-15 years to reach that asymptote, so I’m thinking that along the way we are going to see Bitcoin at $250,000 by 2022. That was one way I looked at predicting it.
“I also look at Bitcoin as a network effect. For instance, if I have Bitcoin and no one else does, then its worthless. But, if I have Bitcoin and you have Bitcoin, and we both recognize that, then we have one connection. Then, the connection grows – it’s the square of how many nodes are in the network. Right now there are 40 million Bitcoin wallets. I think that this number will continue to grow and the value of Bitcoin will be determined by the square of that.”