This July, software grandee John McAfee donned the fools cap and brought down roars of laughter upon his head
This bedlamite actually predicted bitcoin would reach $500,000 by the end of 2020.
His forecast was rooted in the lunatic assumption that bitcoin would close 2017 at $5,000.
Thirty days remain in 2017.
And McAfees $5,000 bitcoin is miles off course.
For today, bitcoin trades not for $5,000 but $10,665.
Has the supposedly delirious McAfee undervalued bitcoin 50%?
And might bitcoin be worth not $500,000 by the close of 2020 but $1 million?
Preposterous questions, we admit.
But we live in preposterous times… and are asked to believe preposterous things.
That deficits dont matter, for example that todays stock prices are justified by fundamentals that the true unemployment rate is 4.1%.
Or that Janet Yellen is fun at parties.
Why is $1 million bitcoin any less plausible?
Here madman McAfee rises in defense of his claims:
When I predicted bitcoin at $500,000 by the end of 2020, it used a model that predicted $5,000 at the end of 2017. BTC has accelerated much faster than my model assumptions.
And here he fits himself for the straitjacket:
I now predict bitcoin at $1 million by the end of 2020.
McAfee is so confident in his $1 million forecast hes placed what we can only call a high-stakes wager upon it.
To repeat it in these pages would run afoul of our strict Presbyterian standard.
Let us simply state that hes putting his manhood on the line.
But could McAfee be right?
Could $1 million bitcoin be three years off?
Bitcoin ended 2014 at $307.
Three years later, its $10,665 over 30 times higher.
Why cant it rise another 30 times in three years? Or more?
Bitcoin was treated to last rites at $200 $1,000 $3,000 $10,000.
Each time its stormed from its death bed with defiant yells and obscene gestures for the mortician.
Why should this time be different?
Perhaps thats true, you say.
But, comes your objection:
Even if bitcoin increases another 30 times from todays $10,000 that only means $300,000 bitcoin by the end of 2020.
$300,000 is handsome but not $1 million.
Ah, but McAfees formula involves a complex algorithm.
The price increases increase at an increasing rate as bitcoin use increases.
$1 million bitcoin may stagger your sensibilities if you do not own bitcoin today, that is.
But James Altucher is a former hedge fund manager who knows the color and the business of money.
Hes also a brainy computer programmer whos penetrated the technical riddles of cryptocurrencies like bitcoin.
And James agrees with McAfee that $1 million bitcoin by 2020 is possible:
“I’ll say $1 million by 2020 as well, easily,” James told CNBC this Wednesday.
Easily did you catch that?
How does bitcoin travel the impossible path from $10,000 to $1 million, James?
There are 15 million millionaires around the world. All their financial advisers are going to say, Hey, buy a bitcoin. You need some exposure.
Theres justice here.
The cryptocurrency market remains exceedingly slim despite the screaming headlines.
As ARS Technica confirms, Few people own any bitcoins at all.
If bitcoin finally seduces mainstream finance, the royal road to $1 million may open as the money floods in.
But put $1 million bitcoin to one side for the moment.
James believes the cryptocurrency market overall will be worth a cosmic $200 trillion one day.
Perhaps at this point you wonder whos sunk deeper in madness James Altucher or John McAfee.
But James builds his case on solid rock:
There is currently $200 trillion in cash, money and precious metals used as currencies in the world. Meanwhile, theres only $200 billion in cryptocurrencies. Cryptocurrencies are eventually replacing traditional currencies.
So that $200 billion will eventually rise to the level of currencies. And probably sooner than we can imagine.
If James is half right no 10% right then owning the right cryptocurrencies today is a passport to Elite Street.
Were on the ground floor of an enormous trend thats going to change the world, declares James.
(James has agreed to host a special, free live event Monday evening to show you the possibilities and answer any questions you might have about cryptocurrencies.Click here to learn more).
We admit… We havent the dimmest notion where bitcoin will trade in three years time.
Neither $1 million nor zero would drop our jaw.
But if bitcoin does go to $1 million todays $10,665 would be a bargain even at 10 times the price…
Below, James Altucher shows you why cryptocurrencies are the future of money. But how many cryptocurrencies are legitimate and how do you separate them from the frauds? Read on.
Managing editor,The Daily Reckoning