Cryptocurrencies have a high chance of being worth trillions of dollars in the future, according to one top venture capitalist.
Albert Wenger, partner at Union Square Ventures, a venture capital firm that has invested in several blockchain start-ups, said there is "irrational exuberance" in the cryptocurrency market, but in the long term, the value of these digital coins could go higher.
"So I believe there's a good chance that cryptocurrencies taken together as a bucket will be worth trillions of dollars. We are a long way from that," Wenger told CNBC in an interview on Thursday.
Bitcoin smashed through the $11,000 mark this week before seeing a pull back. Cryptocurrencies are known for being volatile with huge price swings daily.
Speaking to CNBC at the Slush technology conference in Helisnki, Finland, Wenger said it's too early to tell if cryptocurrencies are in a bubble. But he referenced Amazon's share price since its initial public offering (IPO) in 1997, and said a stock chart over the last 20 years is an upward curve.
While Amazon had some steep drops in share price in the early days, the overall share price has risen since it went public.
"If you look at (the) Amazon stock chart, it looks like this massive upward sloping curve. But then if you zoom in you see in the beginning there was this very quick run up and then this big drop off. So the way I look at this (cryptocurrencies) is when we look back at it from far in the future, it will be a very massive run up. The current run up could turn out to be a blip on that chart," Wenger said.
"So I think it's you know, once you reach the territory we are in today, there's definitely a way for it to go down. And there's definitely also a path in the future where, cryptocurrency as a whole will be worth trillions of dollars."
The total market capitalization or value of all of the world's cryptocurrencies is around $300 billion, according to data from industry website Coinmarketcap.com. So there is still a long way to go to reach the trillion dollar mark.
Wenger's bullishness also mirrors others in the market. Ronnie Moas, founder and director of Standpoint Research, recently told CNBC he expects bitcoin alone to be worth a trillion dollars in the next few years. Former Fortress hedge fund manager Michael Novogratz, who correctly predicted that bitcoin would exceed $10,000, told CNBC the market cap of the cryptocurrency could reach $2 trillion by the end of 2018.
But there are also massive cryptocurrency skeptics, most notably JPMorgan Chase CEO Jamie Dimon who called bitcoin a "fraud" and said anyone who invests in it is "stupid".