Silicon Valley VC Thinks Single Bitcoin Could be Worth $100,000

Chris Dixon, a partner with Silicon Valley venture capital firm Andressen Horowitz, insists that virtual currency bitcoin can become the leading means of making payments on the internet. If that happens, one bitcoin could be worth $100,000.

A bitcoin trades at over $800 on some online money exchanges. The currency was worth $13 a year ago.

However, the worldwide software system that drives the virtual currency will stop minting money sometime in the next century, when there are about 21 million in circulation.

Bitcoin's value can rocket on the back of a surge in popularity and from the likely demand-supply mismatch.

Dixon believes bitcoin can offer a payment system on mobile devices that is not controlled by any one company, reports Wired.com.

However, he acknowledges that bitcoins are extremely speculative investments. Dixon says he owns less than one bitcoin himself because he is not in the currency speculation business.

"I think [a bitcoin] could be easily worth $100,000," Dixon says.

"Domain names are an analogy," he says. "It would have been absurd to say in 1993 that domain names were worth $10m each."

The personal computer, Linux, and the internet "were dismissed, and there was a sense in which this dismissal was correct because at the time those technologies were not capable of serving the most valuable customers. They weren't good enough," says Dixon.

However critics "systematically underestimated" the power of these technologies as platforms, he says. "They get better at an exponential rate and all these criticisms go away," Dixon says

Dixon understands the bitcoin market.

In December 2013, Andreessen Horowitz led a $25m investment in Coinbase, a San Francisco-based bitcoin start-up and Dixon has joined Coinbase's board.

Earlier in 2013, the VC major invested in Ripple, an online marketplace where digital currency enthusiasts can trade their bitcoins, alongside other currencies.