Strategic investor Lyn Alden says the macroeconomic environment in 2020 is extremely favorable for Bitcoin.
Strategic investor Lyn Alden believes that Bitcoin’s growing network effect along with favorable macroeconomic factors may bring its market capitalization to $1 trillion over the next few years.
In 2017, Alden was skeptical of Bitcoin (BTC), as the network effect of the main krypton currency was still relatively weak:
„I was worried about dilution. …] So, if there’s no network effect to retain control, you can see that kind of market cap distributed across multiple different protocols.
Three years later, Bitcoin has not only maintained its market dominance, but its network effect is destined to grow even more. In fact, some analysts have said that the latest integration of crypto-currencies into PayPal can triple Bitcoin’s user base.
The macroeconomic environment generated by the COVID-19 pandemic, according to Alden, also favors Bitcoin.
In particular, the printing of central bank money and historically low interest rates are increasing the attractiveness of scarce assets that retain their value in an inflationary environment, such as gold and Bitcoin. This is why Alden has predicted a significant capital outflow from traditional assets to the main cryptomoney in the coming years.
„If Bitcoin ever reaches $1 trillion, that’s still 10 percent of the size of gold. […] Could it reach 10% of the gold market capitalization? I think so,“ he said.
It is necessary to remember that, originally it was promoted by representatives with a certain „fanaticism“, staunch believers in the value of its decentralization and the elimination of an intermediary. This was obviously not to the liking of the governments and the immediate response was warnings from the Central Banks and Financial Institutions of the major economies.
At the same time, on the side of the companies, there was no clear definition since, for most of them, the phenomenon was incomprehensible and it was not possible to envision a value proposal; however, some took advantage of the 2017 „boom“ and focused on the development and application of blockchain, in fact, the argument was that the use of such technology optimized the processes and provided greater confidence and transparency, some of them were Allianz SE, Ant Financial, Hyperledger, BNP Paribas. Between 2017 and 2018, there was an upward trend in the value of companies due to the use of the technology, but not really due to the investment in cryptoactives, specifically bitcoin.