The next time Bitcoin hits a bull run, the total cryptocurrency market capitalization will grow by 1000 percent predicts Pantera Capital Co-CIO. In other words, the global crypto market valuation can grow to be ten times bigger than the current ~$210 billion.
That is the prediction of Joey Krug, the Chief Investment Officer (CIO) at Pantera Capital, one of the largest cryptocurrency investment funds in the world.
Speaking to Bloomberg, Krug predicted that the next upsurge in prices could see the crypto market’s valuation hit $2 trillion. He added that:
“If you look at that next bull run, I think the crypto space overall could hit 10x from here.”
The current total cryptocurrency market capitalization is just over $210 billion, having lost over 60 percent of its value in the last nine months. The current top three cryptocurrencies have their market caps at:
- Bitcoin (BTC): $114 billion
- Ethereum (ETH): $21 billion
- Ripple (XRP): $18 billion
In comparison, the top three crypto assets alone had a combined market capitalization of over $520 billion at the beginning of 2018.
According to historical snapshots from XBT.net, at their prime, Bitcoin (BTC) had a market cap of $287 billion; $123 billion for Ripple (XRP), and $106 billion for the then third-largest cryptocurrency Ethereum (ETH).
Major financial institutions are coming
He also said that in previous market cycles, news about market entry by major financial institutions such as Fidelity Investments and Intercontinental Exchange (ICE) would have catalyzed an upsurge in speculative investments.
That did not happen yet, and thus the Pantera CIO believes that the current market only needs concrete crypto adoption developments to trigger significant price upswings before a market-wide boom.
Scalability will drive adoption
However, he says that this will only happen if cryptocurrency networks work on how to increase network scalability. According to him, crypto and blockchain development as it exists now is similar to what the internet was like with dial-up.
He said scalability is likely to play a significant role in bringing into crypto the market makers, one of the hurdles to market liquidity.
He said that:
“If you look at the internet, it’s easy to say, ‘Well, you just create an app, get some users, and then you solve the scalability problems.’ But these are all markets, and so if you don’t have scalability, you don’t have market makers, and so you don’t have liquidity.”
Krug notes that the leading crypto asset Bitcoin is on the right track with scalability solutions that include Lightning Network.
Lightning Network (LN) is a second layer protocol that allows users to utilize off-chain payment channels to make instant, faster and cheaper transactions for smaller payments. The Liquid Network, in contrast, is targeted at large transactions.
Liquid Network is developed by Blockstream as a federated Bitcoin sidechain for crypto exchanges and financial institutions to move vast amounts of BTC faster and privately across the blockchain.
Similar technologies are being pursued on other blockchains like Ethereum. Although most of these efforts are not ready for large-scale adoption, Krug has tipped some cryptocurrency networks to attain speeds similar to those of Visa and Mastercard in the next two years.
That should be the time crypto breaks even, although it is not indicative that the market will remain bearish till then. It may, however, remain range-bound till a new catalyst pushes it higher.
At the moment, Bitcoin (BTC) prices are holding above 6.5k as research shows that the market sentiment has improved over the last month. Fundstrat Global also released survey results that showed institutional investors are bullish about Bitcoin’s future performance.