Bitcoin to reach $5 trillion market cap in 5-7 years - Robert Breedlove
"I think the real dominoes fall when we hit a $5 trillion market cap, and we're close now, we're sub-$1 trillion," he said. I think within five to seven years we're going to be at that critical threshold where Bitcoin starts to bend the world to its will," he said.
Speaking to Michelle Makori, editor-in-chief of Kitco News, Breedlove said that eventually, central banks will begin buying Bitcoin, and that would place significant inflationary pressure on the price.
His comments come as inflation in the U.S. hit a 40-year high, with the last headline consumer price index print coming in at 7%.
Breedlove has previously said that inflation is "theft" and that money printing is "legalized counterfeiting."
"Inflation is a very muddied term to begin with. People often refer to it typically in terms of price inflation, because that's what we experience in our day-to-day life. But, when I use the term inflation, I'm specifically referring to the arbitrary expansion of a fiat currency supply within the protection of a legal monopoly," he said.
Furthermore, Breedlove said that the U.S. will eventually be "hyperinflated" out of "meaning".
"I think the U.S. dollar will be hyperinflated by the year 2035. During that time, when the U.S. dollar is hyperinflating, the price of Bitcoin in U.S. dollar terms is going to be going astronomical…$1, $5, $10 million. At some point though, it just loses all meaning, the dollar itself loses meaning. Go look at Venezuela today," he said.
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It is therefore not a stretch to imagine Bitcoin being a unit of account in itself, he said.
"Ultimately, the U.S. dollar hyperinflates and it will be painfully obvious in the Bitcoin price that this is occurring and at some point, you just have to reprice your life. You start pricing your life in Sats, you start denominating trades in Sats," he said.
On downside risks for Bitcoin, the world's largest cryptocurrency faces few existential threats, and only tail end probability events would significantly damage the price, or "black swan" events, he noted.
"This could be something in the protocol layer, we could break elliptic-curve cryptography, there could be some cosmological event, maybe an electromagnetic pulse could wipe out everything electronic in the world for a long period of time. All of these are real threat." Breedlove said.
However, the biggest threat to Bitcoin is regulatory in nature, Breedlove said.
"The number one known unknown is, in my opinion, the response of the state. How hard are they going to come down on this thing? We saw Executive Order 6102 back in the 1930s where they outlawed the private ownership of gold. That was done under threat of imprisonment and fine but the actual enforcement tended to be focused on centralized custodians, so they weren't going door to door, and telling people to give them gold. They were just going to where people custodied their gold and confiscating it. All of these enforcement measures are more difficult on a Bitcoin Standard," he said.
Ultimately, what would change Breedlove's long-term bullish stance on Bitcoin is such a Black Swan event that would "radically" reduce the hash rate.
"The hash rate is how much energy and capital is being allocated towards Bitcoin production and security, which, I would expect to be reflected in price. It would take a heck of a beating because right now, Bitcoin is by far the most secure computing network in human history. We saw China outlaw Bitcoin mining a few months ago. The hash rate took a huge drop, 40%, and it's since over its original high point, where it was before the China mining ban," he said.
For more information on monetary policy versus morality and how Bitcoin solves the world's most pressing financial problems, watch the video above.
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