Even though Bitcoin has failed to regain its recent peak of $42,000, BTC estimates exceeding $100,000 still seem plausible to others.
Given bitcoin’s slowing down the price in recent days, with the highest cryptocurrency currently floating about the $32,000 level, it still displays solid technics as well with a thirty-day price rise of almost 40 percent. Not just that, but also after its latest dip—which saw the digital asset dropping from its newly recorded all-time high of about $42,000 to its present value—the highest crypto has stayed in the green over the past 12 months, with a peak value of almost 300 percent.
In this regard, since the fourth quarter of 2019, a number of conventional financial players have been projecting big things for Bitcoin (BTC), notably when policymakers around the world begin to print money in the form of “economic stimulus packages,” leading to concerns of inflation being more prominent, but also of a looming economic catastrophe that could theoretically lead to a global recession.
For example, in the second quarter of 2020, the US economy collapsed at an alarming pace, with the gross domestic product of the global superpower, which reflects the nation’s overall production of goods and services, collapsing by 31.4%.
As a consequence of such developments—including the alarming pace of money being printed globally by central banks—many investment firms and financial institutions are now starting to see Bitcoin’s future, especially as a buffer against monetary inflation, amid its current levels of volatility.
Many institutions see BTC at $100,000-plus
Earlier this year, American megabank JPMorgan Chase’s management team, headed by Nikolaos Panigirtzoglou, argued that the $146,000-plus potential goal could be viable for BTC by the end of 2021, adding that the digital currency appears to be the prime candidate to replace gold as a long-term store of value, particularly for the budding base of younger, more tech-savvy buyers.
In a similar way, the latest data published by Pantera Capital, an investment company and hedge fund, reiterates JPMorgan’s feelings regarding BTC, indicating that its market activity follows closely the Stock-to-Flow formula, thereby reaffirming its confidence in the $115,000 digital asset by Aug 1.
The S2F model developed by PlanB looks at the BTC halving of events taking place approximately every four years and how they play a direct role in improving the value of the currency approximately six months after each period. In this regard, it can be shown that, after each of the previous three halvings, Bitcoin has shown tremendous growth. For eg, after the May 2020 halving, the price of 1 BTC stayed at $8,000, only to cross the $15,000 mark after exactly six months.
In a recent study, Raiffeisen Bank has used the S2F model to figure out where Bitcoin could be going in the immediate future. According to the company’s analysis staff, price goals above the $100,000 mark, or even $1 million mark, could be reached. “The fact is that now that the value has more than tripled in 2020 and the momentum remains strong, further gains in the future should not surprise us,” reads the report.
Other notable players in the world of conventional finance who have predicted major things for BTC in the short term include individuals such as Andy Yee, Director of Public Policy for Greater China at the Visa cross-border payment provider, who claims that this rally is distinct from the 2017 rally, as it signals a move from high-speculative, non-functioning tokens to Bitcoin and Ether (ETH).
Similarly, Thomas Fitzpatrick, the global head of the U.S.-based finance giant CitiFX Technicals business intelligence product, reportedly wrote in a private report—which leaked online—that by December, Bitcoin has the capacity to climb to a price of about $318,000.
Fanciful projections or imminent reality?
Even if the S2F model was at first one of the only technical metrics that indicated Bitcoin’s astronomical growth, it now seems that a growing number of experts and observers are starting to see the technological and monetary proposal put forward by BTC and other cryptocurrencies.
Sam Tabar, co-founder of Fluidity—a group behind AirSwap’s trading platform—and former head of capital management for Merrill Lynch told Cointelegraph that everybody needs to note that the excitement around BTC at this stage is not only fluffy, as the hype is now backed by actual substance, adding:
“Bitcoin is not ruled by any one person or government. Instead, it is ruled by the simple laws of supply and demand. […] In essence, Bitcoin is two sides of the same coin: On the one side is a global currency, and then the other side is digital gold.”
As a substitute for a global currency, the friction of buying crypto has been greatly minimized, as it is cheaper than ever before to purchase Bitcoin. Similarly, as a surrogate for gold, Tabar claimed that bitcoin is being used as a buffer against the U.S. dollar, particularly as recently elected President Joe Biden looks to stimulate U.S. dollar investment to shore up the economy against the consequences of COVID-19 lockdowns.
Providing a more technical breakdown as to why institutions are betting big on Bitcoin, J. P. Thieriot, CEO of Uphold Asset Exchange Network, told Cointelegraph that unlike conventional dollar debasement shelters like gold and other assets, Bitcoin has nil supply elasticity.
He pointed out that if/when the price of gold hits $3,000, marginal gold mines would shoot again, with the same dynamic being extended to oil and to every other non-math-based account device. Thieriot claims that:
“The unique lack of supply-side elasticity means that, price-wise, BTC will respond more precipitously than things like gold, to exactly the same drivers.”
“BTC is in the early stages of its rollout. As it metamorphosizes from fringe curiosity to portfolio must-have, it’s pretty logical to assume that inflows will grow. If I were a bookie, I’d say the over/under for Dec 31, 2021 midnight… is $85,000.”
Finally, ever-increasing institutional demand seems to be transforming the digital asset market, which, in turn, is driving many banks to make seemingly outlandish price forecasts in relation to BTC. For eg, more funds are now trying to enter the crypto game, and recently, American firm Osprey Funds revealed that it will launch its over-the-counter crypto solution, the Osprey Bitcoin Trust, which is likely to clash with Grayscale Bitcoin Trust.
Investor sentiment surrounding BTC is high
Looking at the investor sentiment around Bitcoin, the digital currency is gradually displaying similarities with the key functions historically given to its consumers by conventional fiat currencies—that is, it has become a unit of account, a norm of deferred payments, and, eventually, a tangible long-term store of value.
In addition, over the course of 2020, a growing array of e-commerce sites also introduced support for Bitcoin and other cryptocurrencies as a means of exchange to pay for products and services. For example, PayPal—a business with a 28-million-dollar merchant base—allows consumers to acquire, sell and store cryptocurrencies through its website.
On the subject, Paolo Ardoino, Chief Technical Officer of Crypto Exchange Bitfinex, told Cointelegraph that market sentiment around Bitcoin is overwhelmingly bullish right now, and that people celebrating the growth of numerous altcoins and other off-chain solutions owe their success to the flagship crypto, adding:
“The king of crypto is the base layer for an emerging alternative financial system. Bitcoin is providing a solid foundation for a staggering array of projects, some of which will fundamentally change the nature of money by the end of the decade.”
Thieriot assumes that the BTC-driven sentiment is the product of the previously unseen levels of currency debasement produced by the monetary response to COVID-19. Beyond retail speculation, he claims that companies are trying to hedge their fiat exposure, obviously seeing some of Bitcoin’s relative advantages over conventional havens like gold and then leaping in. “The early jumpers have been beautifully rewarded, so the trend is likely to continue,” he said.
Finally, Tabar found out that one of the more recent signs of rising market sentiment and institutional adoption of BTC came in the form of recent filings by BlackRock, an American international wealth management firm with $8.7 trillion in assets under management at the end of 2020. A brief glance at the filings reveals a heavy use of the crypto-oriented terminology that indicates that the company’s assets are possibly involved in “future contracts based on bitcoin.”
459 Interactions, 4 today