If his prediction is correct, bitcoin would hit a $2 trillion market capitalization. That’s about a third of gold’s current market cap and 1/40 of the worldwide money supply. ‘Pomp’ cites a 70-75 percent conviction in his prediction.
“I believe that Bitcoin will reach a $100,000 price point before December 31, 2021. My current confidence level of this happening is around 70-75%.”
Path to $100k bitcoin price
The reason for Pompliano’s bullish price target is simple supply and demand economics.
Bitcoin’s total supply is fixed at 21 million giving it a hard scarcity. If demand rises, the price must inevitably move upwards.
“Bitcoin is a fixed supply asset with a disinflationary supply schedule. Over the next ~2.5 years, there will be incredible increases in demand, while the total supply remains fixed and the new daily supply is decreased by 50%”
Pompliano is referring to bitcoin’s halving event in May 2020 whereby daily BTC output will be cut by 50 percent. This “supply shock” which occurs every four years has historically triggered a huge bitcoin price bull run.
Investment firm Grayscale released a report which reveals the halving event is not yet priced into the market.
Catalysts for parabolic bitcoin run
Of course, Pomp’s theory only holds true if there’s demand, but he points to at least three major drivers: