Billionaire venture capitalist Tim Draper is sticking to his bold prediction that bitcoin will hit $250,000 in the next two years, despite the cryptocurrency losing 65% of its dollar value this year and the recent fall of FTX crypto exchange.
Draper, a founding partner of venture capital firm Draper Fisher Jurvetson, is known for successfully timing bitcoin’s $10,000 milestone in late 2017. In 2018, he predicted that bitcoin would hit $250,000 before the end 2022, assuming bitcoin will replace 6% of all government-backed currencies in circulation in 2018.
Although bitcoin is accepted as a form of payment in some places today, there is no evidence that it has replaced fiat currency in any significant way. Yet Draper didn’t seem completely wrong late last year when bitcoin surged 10x to $64,400 in just 18 months. However, the cryptocurrency market quickly turned south, with the stock market in 2022 as bitcoin fell and ETH, the second-largest cryptocurrency by market capitalization, fell over 67%. %.
Bitcoin’s fall accelerated last month following the collapse of FTX. The cryptocurrency has lost around 20% of its dollar value since FTX’s financial troubles began in early November.
Make a fortune buying bitcoin for $632
Draper, 64, is an early investor in Tesla and SpaceX. In 2014, he bought 30,000 bitcoins confiscated by US Marshals on the closed Silk Road black market for $632 each. Those coins would be worth half a billion dollars if he never sold any. Forbes pegs Draper’s net worth at $1.2 billion.
Draper extended its six-month forecast to mid-2023 to account for crypto-specific and macroeconomic impact. And if that doesn’t happen, bitcoin is sure to hit the $250,000 mark before the end of 2024.
“I’m almost 100% sure I’ll be right in 18 months,” Draper said in an email.
His bitcoin prediction may not apply to other cryptocurrencies, as not all cryptocurrencies are created equal. Draper has more faith in decentralized cryptocurrencies.
A decentralized cryptocurrency means that its rules are enforced by nodes or computers running bitcoin software, instead of miners or developers. Most cryptocurrencies are created as decentralized tokens by design, but if one or a few entities control a significant majority of the nodes, this results in a more centralized system where those entities may be able to change the rules of some cryptocurrency at will. According to this definition, FTT is a centralized token because it was mainly controlled by FTX. And when FTX went bankrupt, the value of the digital token plummeted in response.
“Decentralized crypto like bitcoin, tezos, bitcoin cash, aragon aardano is way better than centralized crypto,” Draper said. “I don’t know why someone is still holding centralized crypto unless it has a specific purpose like XRP or ETH. You would think that FTX/FTT would have taught this lesson.
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