Greg Foss, the Executive Director of Validus Power Corp, which uses flare gas to mine Bitcoin, lays out the case for a $2 million BTC price.
Although sky-high price predictions are nothing new, Foss’s forecast is up there among the highest. Having said that, what is the reasoning behind his prognosis?
Oil and gas to spur BTC’s rise
Lofty price predictions are part and parcel of the cryptocurrency space.
For example, Gemini’s Winklevoss twins predicted a $500,000 Bitcoin price by 2030. While 2017 saw Wences Casares, a PayPal board member and CEO of Xapo, give a $1,000,000 price by 2027.
However, both of those pale in comparison to Foss’s $2,000,000 price prediction.
Speaking with Anthony Pompliano, in justifying his position, Foss said that he thinks oil and gas will be priced in BTC, rather than dollars, within the next ten years. This will elevate its status to the global reserve asset.
“I think Bitcoin has a chance of becoming the global reserve asset of the world. Why? Because I think oil and natural gas will shortly, and when I say shortly, in the next ten years, become priced in Bitcoin.”
Giving the example of Russia and its oil and gas resources, Foss spoke about the raw deal Russian energy suppliers face by selling in dollars and receiving a devaluing asset in return.
“If you’re Russia, do you want to sell your valuable resources for this thing called U.S dollar, which is a programmed to debase fiat currency, or do you want to hold U.S treasuries which is a fiat contract, which is also programmed to debase?”
He added that Bitcoin, as “digital energy,” poses a better deal. And over time, as more countries come to that realization, there will be a gradual shift where nations want to price energy in Bitcoin.
Bitcoin at $2 million?
Previous to this explanation, Foss mentioned that the total value of global assets, which include equities, debt, currency, fine art, gold, etc., are valued at $900 trillion.
In coming to his $2 million BTC price, Foss assumes that Bitcoin could capture 5% of the total global value of assets.
Doing the sums with this line of reasoning puts BTC at a $45 trillion market cap, which gives a price of $2.142 million per token when apportioned across the total supply.
“So what percentage of the reserve asset does it make sense that $900 trillion could capture? Would it be 5%? I think that’s pretty low, but let’s assume it’s 5% of $900 trillion. 5% of 900 trillion is 45 trillion. 45 trillion divided by 21 million Bitcoin, that’s over $2 million a Bitcoin.”
As an “insider” of the oil and gas industry, Foss may be right about the end of the petrodollar. But, from where we currently stand, it’s still a big leap to assume a petrobitcoin would take its place.
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