$100,000 bitcoin! I thought that would get your attention. A stupid, unfounded prognostication? Probably. But here are three reasons it could happen. How to justify an extraordinary headline Get this wrong (and he very rarely does) and yours truly gets the headline fired back at me two years later by petty trolls anxious to undermine my every utterance. So just to qualify this headline (which actually happens to be one that I did write), I am describing why bitcoin could get to $100,000. I am not saying that it will. 1. Portfolio allocation and career risk Bitcoin and cryptocurrencies are a new asset class. They have qualities of cash, qualities of gold and, as the ICO (initial coin offering launches of new cryptocurrencies) movement grows, they will have qualities of shares too, but they are in themselves an asset class. As the space grows, crypto could become a core feature of portfolios, just as other assets now are. With the market currently rising as it is, investors will demand it of their fund managers and financial planners, who will then have to deliver, or many will take their business elsewhere.

It's a process that financial blogger Josh Brown, aka The Reformed Broker, calls "institutional ass-covering". He argues that the career risk involved in not being in an asset-class that is rising, is what fuelled the hedge fund mania of the 1990s and the commodities boom of the 2000s. More and more crypto products will be invented to meet this rising demand, including, eventually, a proper bitcoin exchange-traded fund (ETF) of some kind (we'll get there eventually). This is the gradual institutionalisation of the space. The total value of the global stocks is around $80trn. The government bond market is perhaps twice the size. The current bitcoin and crypto market cap is sub-$200bn. It's tiny in comparison. My colleague Charlie Morris points out that by the end of its 70s bull market, the global gold market reached a value equivalent to the size of the New York Stock Exchange (NYSE). The same happened with Japan by the end of the 80s, dotcom by 2000 and commodities by the end of the bull market of the 2000s. It's pretty clear that crypto is the bull market of this decade. The current value of the NYSE is around $20trn. Even if the market cap goes to a fifth of the size of the NYSE, then at $4trn, that would make the crypto market 20 times bigger than it is today, with bitcoin comfortably surpassing $100,000. It "only" needs to rise around 14 times from today's price of $7,100. Cripes it's gone up 14 times enough times in the past! 2. "It's another one of those" If you read my piece last week, you might remember billionaire hedge fund manager Ray Dalio's principle of asking "which one of those is it?"