Last year the price of one Bitcoin was predicted to reach $10,000 but Bitcoin blew past that prediction and was worth over $20,000 per Bitcoin towards the end of 2017.

Now we are in 2017 and the next prediction is $25,000 — $60,000 for 2018 and $250K — $2m in the long term (around 2020–2025).

Based on Bitcoin’s current performance and the fact that less than 0.1% of the world’s population owns any Bitcoin I believe we are on track to smash past $25k, Bitcoin hitting $25k will just be another milestone on the way to a much higher valuation.

Here is why I believe this can happen.

I am sure you have heard of Berkshire Hathaway, the holding company founded by legendary stock investor Warren Buffet, well currently one stock of Berkshire Hathaway will cost you $ 304,020, that’s over a quarter of a million dollars for just one share.

I see Bitcoin going in a similar direction, the reason why I believe Bitcoin can hit 6 figures is this one simple fact related to the stock market that it is still relevant to cryptocurrencies, that is price dilution, this is achieved by issuing a stock split.

You see without a stock split many shares of big companies would be trading at over $100,000+, but a stock split increases the number of the company’s outstanding shares by dividing each share, which drives down the price whilst the market capitalisation (marketcap) stays the same. Its like the value of $10 staying the same whether you use a $10 dollar bill or two $5 dollar bills.

For example:

John Doe owns 1000 shares of the mega-corporation “Company X”, Company X’s shares currently trade at $1000 a share so John Doe’s holdings are worth $1m. Company X wants to attract new public investors and they feel they can do so by reducing the barrier to entry for investors who may not want to pay $1000 a share.

So Company X issues a stock split, so all of the companies shares are divided, lets says they issue a 2-for-1 stock split, that means every investor receives an additional share for every share held. That means John Doe now has 2000 shares of Company X but they are now valued at $500 instead of $1000. 2 shares now equal the value of one share before the split and 2000 x $500 = $1m so John Doe’s holdings are still worth the same amount before the split.

Now imagine Company X keeps on issuing stock splits to keep the price low, your investment in Company X can grow by 1000% but you will still won’t see astronomical stock prices.

How this applies to cryptocurrency and Bitcoin in particular.

Bitcoin is a cryptocurrency and it has a limited supply, no new Bitcoins can be added into circulation. Remember the example where Company X added new shares into circulation which subsequently reduced the price? That cannot happen with Bitcoin and most cryptocurrencies (a few can add more coins into circulation but there is usually a very good reason for this).

When you include the fact that you do not have to buy a full Bitcoin (which reduces the barrier to entry, the problem Company X wanted to solve) then I cannot see a reason — apart from total collapse — why Bitcoin cannot pass $25K per Bitcoin, at this point I think this is virtually guaranteed.

I hope you found this post helpful, feel free to check out these useful resources below:

You can keep your cryptocurrencies safe and secure with a Ledger hardware wallet.

You can buy Bitcoin, Ethereum, Ripple, Bitcoin Cash, Bitcoin Gold and Stellar Lumens from anywhere in the world using CEX

You can buy Bitcoin, Ethereum, Litecoin, Ripple, Bitcoin Cash and Dash from BitPanda if you live anywhere in Europe.

You can buy most cryptocurrencies/altcoins from Binance cryptocurrency exchange. (Note: You need Bitcoin or Ethereum to buy altcoins from Binance).

You can also keep up with me on Twitter.