Bitcoin worth USD 1 million one day says IBM expert

  • By Carole Ann Furman

  • March 1, 2019
  • 9:04 pm BST

Vice President of Blockchain & Digital Currencies at IBM, Jesse Lund, has been extremely bullish about the future prospects of Bitcoin, and has been quoted as saying that he believes the value of the leading cryptocurrency will be worth an extremely large amount in fiat currency terms one day.

In an interview held at IBM’s Think 2019 event, Lund said: “Let me just say this, I have a long-term outlook […] and it goes back to the discussion about the utility of the network leading to a higher price, so I see bitcoin at a million dollar someday.”

The interview covered a wide range of topics regarding various aspects of blockchain technology and the way that IBM works in the sector. Lund’s hugely positive long-term prediction for Bitcoin came after he had suggested that on New Year’s Eve 2019 the digital token could be worth USD 5,000. Lund previously worked with US banking giant Wells Fargo, so is someone whose opinions on the pricing of the original crypto coin will be taken very seriously by many CFD traders interested in forex markets.

“If bitcoin is at a million dollars, then a satoshi [1 BTC = 100M satoshis] is at value parity with a US penny, and that means there’s over 20 trillion dollars of liquidity in this network […] Think about how that changes things like corporate payments”, he explained.

Blockchain potential

Lund also has personal insights as to how the blockchain tech that underlies cryptocurrencies will develop and flourish. “I think the landscape of banking, of lending, and payments, it’s going to radically change”, he said. “50 years from now, we’re gonna look back and say ‘paper money, what was that?’” Lund suggested.

IBM is one of the major household name companies that has been exploring different applications for blockchain tech, and it has already backed a stablecoin project called Stronghold, which was the first stablecoin to launch on the Stellar network.

When the company launched the coin, Lund told Reuters news agency: “IBM will explore use cases with business networks that we have developed, as a user of the token. We see this as a way of bringing financial settlement into the transactional business network that we have been building.”

Business problems

Another influential voice at IBM, Blockchain Leader for Central and Eastern Europe (CEE) Maciek Jedrzejczyk, has also been commenting on how the company might use blockchain systems to solve real business problems. Noting that the focus for blockchain is often simply seen as a function for cryptocurrencies, Jedrzejczyk said: “You have to be aware of the limitations of the technology, and you need to let your clients know.”

Cambridge Associates, a consultant for pensions and endowments, is another voice raising the case for blockchain tech to be used as a tool by the wider business community. The consultant believes that institutional investors should look more into cryptocurrencies and wrote in a recent research note: “Though these investments entail a high degree of risk, some may very well upend the digital world.”

Wider investment

One such example of wider investment is news that the University of Michigan, with an endowment valued at about USD 12 billion, is thinking of investing more in a16z, Andreessen Horowitz’s crypto fund. Another is that Eurex, Germany’s Deutsche Börse-operated derivatives exchange, is making arrangements to launch several new futures contracts that will be tied to cryptocurrencies.

As forex-orientated CFD traders will already know, the crypto market is a particularly fertile area for taking positions on a range of underlying assets, and every time a major financial institution puts its weight behind digital coins or blockchain tech, it can only be good news for the entire sector. In the case of Eurex and its plans for Bitcoin, Ethereum, and XRP, it means that plans that have been in the offing since 2017 are finally coming to fruition.

For the University of Michigan, notes form a recent meeting’s agenda said “as opportunities related to crypto networks transition from being undefined to becoming more visible and sharply defined, the need for a separate thematic fund may recede […] crypto is currently regarded as a distinct type of technology by entrepreneurs, funding sources, and developers. By creating a separate fund, [Andreessen Horowitz] hopes to be better positioned within this community than would be the case by continuing to invest through its generalist IT funds.”

Having already backed a16z to the tune of several million dollars, it isn’t the only university to have invested in Horowitz’s fund. Legendary chief investment officer at Yale University David Swensen has been reported to have invested in a16z and also another crypto-focused venture fund Paradigm. A study from Yale University found that cryptocurrencies could offer higher risk-adjusted returns than those generated by stocks and other assets that have traditionally been thought of as “safe”.