John McAfee had an estimate that Bitcoin would be $ 500,000 in 3 years. In fact, after a while, on his sharing on Twitter, he said that he made this estimated modeling, that Bitcoin’s current growth rate was quite high from the growth rate he assumes in his modeling, and that Bitcoin would reach $ 1 million at the end of 2020. Do you believe this prediction of John McAfee?
“Do you believe John McAfee’s guess that Bitcoin will be $ 500,000 in 3 years?” He directed the question to other users. Vladimir Novakovski, who worked on high -risk investment funds for 8 years, also gave a significant answer to this question. Here is Novakovski’s answer:
“It is surprising that all of the analyzes about crypto currencies are the basic analysis (ie incomplete and wrong). However, it is more useful to evaluate something in terms of quantity.
What we want to understand is how much Bitcoin is likely to reach $ 500,000. There are several ways to calculate this possibility.
Let’s go completely through coincidences and let’s look at the perspective of a gambler. What is the probability of reaching Bitcoin’s value to $ 500,000 before reaching $ 0? In December 2017, considering that the Bitcoin value is about $ 15,000, we get 3 %of $ 15,000/$ 500,000.
Another way is to calculate probability based on loginormal distribution. What we need to do is to predict the fluctuations of Bitcoin value and the return on the investor. It’s a little hard to predict the return. We can use Bitcoin’s return information to investors in the past, but this is a highly influential prediction. For example, would you expect that the return of a share that is in the first place in the last 5 years compared to S&P 500 index will be at the same rate in the future? You probably don’t expect anything like that. You can think of the same for Bitcoin. Of course, if you haven’t predicted a high value increase before Bitcoin has such a high return.
Depending on this type of calculation, depending on how liberal you are to estimate the expected return, Bitcoin’s probability of $ 500,000 receives a value between 1-10 %.
Another method is to look at the premium prices (term transaction) in the stock market. There is no liquid market for futures, but Bitcoin’s future will be bright and this will change. With the term trading feature, you can buy a purchasing option with Bitcoin’s reaching $ 500,000 – which is proportional to the possibility that the value of Bitcoin will reach $ 500,000 in the maturity filling.
In other words, according to different calculation methods based on, Bitcoin’s probability of reaching $ 500,000 next year receives a value of 1-10 %. Furthermore, considering the changes made by the beginning of this new future on the stock market, it is very difficult to know whether Bitcoin will reach $ 500,000. But in the end, there will be a liquid market where such estimates can be made through futures. ”