Bitcoin would be worth $1 million if everyone adopts it as a currency, expert says

Bitcoin would be worth $1 million if everyone adopts it as a currency, expert says

Key facts:
  • Bitcoin would be the best store of value in history if it becomes a global legal currency.

  • This says specialist, in tune with those who believe that its price will rise if adoption grows.

One of the doubts that arise about the global advance of cryptocurrencies is whether it is good for the price of bitcoin (BTC) to be adopted as legal tender in different nations. Recall that, so far, there are only two small countries on the planet that have done this: El Salvador and the Central African Republic.

According to a Crypto News survey conducted via Twitter, the 72,4% of 312 votes believe that it would be good for the price of bitcoin to be adopted as legal tender. While the rest think otherwise, or downplay the impact that these government decisions may have on cryptocurrency.

A follower commented that in the short term it would be good news, but in the long run and with an unconsolidated policy on the future, it could affect its price. He believes this is what happened in El Salvador. He also stated that a change in his government would generate a lot of uncertainty in the value.

Another user simply stated: “It’s no use at all.” In this sense, it is worth clarifying that the adoption of BTC as a legal tender has entrenched its global reputation and made it increasingly popular, but it has not necessarily generated a direct impact on the price. Perhaps because of the size of the countries that have integrated them and their role in the global economy.

But what if the rest of the world followed in the footsteps of El Salvador and the Central African Republic by adopting bitcoin as legal tender? Would it have a significant impact on the price of BTC? Faced with this unknown and the contrast of thoughts, we consulted the opinion of three industry specialists, who gave us their vision about it.

From Spain, Herminio Fernández, the founder and CEO of EurocoinPay, a cryptocurrency payment application, told us: “If adopted legally, bitcoin would be the best store of value and the best money that society has ever known.”

The businessman elaborated that, although it is not known exactly, it is estimated that there are at least 21 trillion dollars issued globally. This leads him to think that, if bitcoin becomes a legal tender in all countries of the world, it would absorb all that fiat money. In such a case, he understands that the price of 1 BTC would be USD 1 million, considering that its issuance is limited to 21 million.

In fact, it should be borne in mind that its price would grow more if it replaced the rest of the money in the world. The US dollar accounts for about 59% of the world’s foreign exchange reserves, according to the latest Statista report. In other words, BTC should also cover more than the 40% that would remain if it is adopted globally as a currency.

In the third quarter of last year alone, USD 12 trillion was registered as the world’s reserve currency, according to Statista. Source: Statista

Even Fernandez stressed that its value would be even higher, if you count the part that would capitalize on the gold market as a store of value. Precisely because he considers that cryptocurrency is safer and easier to transport, as well as a better unit of account and means of payment. A fact that further expands its demand and may increase its adoption internationally, which consequently would also impact the price of the asset.

The increased use of bitcoin will cause its price to rise, whether it is adopted as a legal currency or not

The price volatility that bitcoin has is one of the reasons why different regulators have expressed their firm disagreement with making it a legal tender. This has been said repeatedly by the IMF (National Monetary Fund) and some central banks.

bitcoin price chart in dollars
Bitcoin’s price volatility is what is worrying regulators as a legal tender. Source: TradingView

However, there are those who consider that the increased use of bitcoin, whether as a legal currency or not, will decrease its volatility. Precisely because it would cause its price to rise and balance. One of those who defends this theory is the financial advisor on cryptocurrencies from Argentina, Agustín Kassis.

The specialist believes that, although bitcoin is volatile in the short term, in two or three years it will not be. As an example, he noted that no one who has bought and stored BTC for three years has lost value. Therefore, he states that it must be understood as a long-term investment.

“The idea of bitcoin is that volatility is reduced over time. As we gain critical mass, that volatility will decrease, because we will have more people with less short-term speculative purposes and who understand that it is long-term, as a store of value,” he said.

Therefore, he maintains that the fact that bitcoin is legal tender is completely irrelevant. As an example, he pointed out that, in Argentina it is not legal to buy dollars, or save, but that does not prevent the inhabitants from looking for ways to protect their money from the incessant inflation and devaluation of the national currency.

Various reports shared here have shown that bitcoin has become a solution to save as an alternative to the dollar in different countries, mainly due to its ease and freedom of access. In general, those who invest in the cryptocurrency have the speculation that its value will grow over time, so they hope to generate profits from their purchases.

The acceleration of the adoption of bitcoin would favor its price

As a conclusion, the economist Natalia Motyl told us that, from a liberal philosophical perspective, you cannot force anyone to use a currency or, in this case, a cryptocurrency. “Ideally, it should be adopted spontaneously,” he stressed. However, he warns that, from an economic point of view, the acceleration of the adoption of bitcoin would favor the stabilization of its price.

“The acceleration of the adoption of bitcoin around the world and as a legal tender in two countries are facts that mark the bullish dynamics in the coming months. Despite the volatility of the market, the truth is that BTC is expected to exceed USD 40,000 again in a short time,” he said.

The price of bitcoin has decreased its volatility in 2022. Source: TradingView.

In this way, he understands that at some point bitcoin is going to reach an equilibrium point, far from the volatility it has today. He argues that the price instability decreases as more people adopt it, so he believes that it is more than beneficial for countries to get ahead of the future and adopt it.

From this perspective, we can conclude that probably the adoption of bitcoin as legal tender would accelerate its use, which would cause its price to rise. Such an upward movement would continue until it achieves an agreed balance between buyers and sellers globally. Although this could happen in the same way if it becomes massive simply by personal decision, a trend that seems to take hold in recent years.