Bitcoin at $773,000? Don’t laugh; hear us out

Many experts like to predict the price of bitcoin, competing in the boldness of their numbers. Recently, InvestAnswers, a serious analyst channel, surprised us by stating its prediction of $773,000 per bitcoin.

This figure was not taken from the ceiling in an attempt to impress our imagination but is based on strict mathematical calculations. Below we show why this number is quite real and explain what BlackRock has to do with it.

The Big Deal

This forecast is based on an analysis of BlackRock’s actions. It is one of the largest investment funds in the world. This important (at the very least, because of its size) fund recently announced plans to provide bitcoin trading and storage services to all its institutional investors, for which it has entered into a business alliance with Coinbase Prime.

Based on this, an analyst at The InvestAnswers channel said that the partnership between the two financial giants could lead to a sharp rise in the price of bitcoin. In his opinion, this collaboration could raise the price of BTC to $773,000. After all, such a partnership will lead to an influx of huge new money, raising Bitcoin’s capitalization by at least 1 trillion bucks.

Show me the math!

The curious reader might agree — yes, the general logic is clear, BlackRock is opening its gateways to invest its many clients in Bitcoin. But where do such fantastic numbers come from?

Let’s try to figure out the math. It’s pretty simple, and this prediction looks logical.

In traditional investing, it is considered that for risky assets (which is exactly what Bitcoin is now), the portfolio usually reserves 5% — this is the standard figure for most strategies. The InvestAnswers analyst called this figure optimistic, and for insurance purposes, he also took another pessimistic parameter — 1%. This minimum percentage limit for risky assets applies when balancing an investment portfolio.

After that, the analyst evaluated all the assets managed by BlackRock and used his digital model to calculate what will happen to the bitcoin price if it is invested according to the optimistic and pessimistic variants. Right away, we will tell you our opinion — this is quite a bold assumption from InvestAnswers, but it is worth admitting that at least the pessimistic option seems more or less possible.

Let’s take a look at what price ranges the Bitcoin digital model has produced. 

Final results

So, we have two results: optimistic and pessimistic. Here are the final figures according to the expert’s model:

• The pessimistic variant (about 0.5–1%) will eventually give a bitcoin price in the range of $90,000–150,000.
• The optimistic variant (about 5%) will give a price at the end of around $700,000.
• Another important factor to consider in this prediction is that money will not flow into crypto instantly (immediately after the launch of this service by BlackRock) — the analyst gives about three years to realize his prediction. 

What do we think of this prediction?

Looking at this logic, and especially the pessimistic (or correctly called conservative) scenario, it does not seem at all fantastic. Instead, it all seems quite logical and reasonable.

Right now, we read in today’s news:

An unknown investor spent $3 billion to buy 133,000 BTC at an average price of $23,000 and instantly made it into the top 3 global whale rankings.

So what is certain is that BlackRock will bring a lot of new guys like the one from these news to the crypto market. Pumping more and more money into crypto will raise the price of crypto assets proportionally and gradually. And who knows, maybe in a couple of years, the price will really reach the declared $773,000.