A CPC Professor: Bitcoin May Back Above $400,000
The price of bitcoin is yo-yoing these days. Chen Jianqi, professor of international strategic research institute at Party School of the Central Committee of CPC, demonstrated his point of view on bitcoin. He also predicted that the future price of bitcoin would move above the $400,000 level against the US Dollar.
Chen Jianqi said that, bitcoin has undergone a gradual evolution from computer code to a kind of international currency. The share of bitcoin in international reserves may rise to around 1%, so a reasonable price of bitcoin is around $6,000 to 7,500 U.S. dollars in the short term.
In the medium term, the share of bitcoin in the international reserves may rise to a same level as the Japanese yen. At that time, $ 23,000 to $ 30,000 USD would be a suitable price for bitcoin.
In the long term, if bitcoin could be accepted by more and more countries on an international scale and has an opportunity to develop into the most important international reserve currency in the future, its price may rise above $400,000 U.S. dollars.
The price of bitcoin has been undergoing drastic fluctuations since from the end of last year until now. In only two months, bitcoin has lost more than half its value since hitting an all-time high of more than $19,000 USD. The price dipped back below $9,000 this week.
To compare the recent bitcoin price with Chen’s prediction, his short-term-price seems too high. However, if we considering the social identity of bitcoin nowadays, then Chen’s price can still be reasonable.
Nevertheless, all the above price predictions are only theoretical measurements which based on the assumption of a good social acceptance and healthy development for bitcoin. However, This assumption is risky.
To bitcoin, there are sill many challenges to face with. For example, it will affect the seigniorage and the state currency sovereignty of various countries. The decentralized characteristic of the bitcoin will force a revolution in financial business industry, especially for the financial payment mechanism.
Remodeling the profit model is not easy for financial institutions, the financial regulatory authorities will also face new challenges in governing cryptocurrency market. The above issues shows the uncertainty of bitcoin in the future.