Greg Foss, the Executive Director of Validus Power Corp, which mines Bitcoin with flare gas, makes the argument for a BTC price of $2 million.
Although outrageous price estimates are nothing new, Foss’s forecast is among the most extreme. Having said that, what exactly is the basis for his prognosis?
The rise of BTC will be fueled by oil and gas.
High-flying price forecasts are a given in the cryptocurrency world.
The Winklevoss twins of Gemini, for example, anticipated a $500,000 Bitcoin price by 2030. In 2017, Wences Casares, a PayPal board member and CEO of Xapo, stated that the price would be $1,000,000 by 2027.
Both of those figures, however, pale in comparison to Foss’ $2,000,000 price projection.
In an interview with Anthony Pompliano, Foss stated that he believes oil and gas would be priced in BTC rather than USD within the next ten years. As a result, it will be elevated to the status of a global reserve asset.
“I believe Bitcoin has a possibility to become the world’s reserve currency. Why? Because I believe that oil and natural gas will soon, and by soon, I mean within the next ten years, be priced in Bitcoin.”
Foss used Russia’s oil and gas resources as an example, describing the unfair bargain Russian energy suppliers are getting by selling in dollars and receiving a depreciating asset in return.
“Do you want to sell your valuable resources for this thing called the US dollar, which is a fiat currency that is intended to debase, or do you want to retain US treasuries, which is also a fiat contract that is programmed to debase?”
He went on to say that Bitcoin is a better deal since it is “digital energy.” And as more countries realize this, there will be a steady movement toward countries wanting to price energy in Bitcoin.
$2 million for Bitcoin?
Prior to this explanation, Foss stated that the overall amount of world assets is $900 trillion, which includes shares, debt, currencies, fine art, gold, and so on.
Foss bases his $2 million BTC pricing on the assumption that Bitcoin will take 5% of total global asset value.
Using this logic, BTC has a market cap of $45 trillion, resulting in a price of $2.142 million per token when divided across the total supply.
“So, what percentage of the reserve asset does $900 trillion make sense to capture?” Is it going to be 5%? I believe the figure is too low, but let’s say it’s 5% of $900 trillion. 5% of 900 trillion equals 45 trillion. 45 trillion dollars divided by 21 million Bitcoins equals more than $2 million each Bitcoin.”
As a “insider” in the oil and gas sector, Foss may be correct about the petrodollar’s demise. However, assuming a petrobitcoin to take its place is still a considerable leap from where we are now.