Bitcoin is bouncing around all-time highs, trading at around $33,500. For Bitcoin bulls, the recent rise in price for BTC has been greeted with a lot of backslapping and comments about how it was inevitable.
Many observers point to the rising demand for Bitcoin as institutional players move more aggressively into digital assets. Just this week, Skybridge announced that it had purchased $310 million in Bitcoin during November and December. Earlier reports regarding purchases by the likes of PayPal and Square have helped to fuel the crypto’s rise.
So will Bitcoin go higher from here? Will it correct? What will Bitcoin’s price be a year from now? Below is a series of comments from digital asset insiders regarding Bitcoin’s future.
Nicholas Pelecanos, Head of Trading at NEM, states:
“If Bitcoin continues to rally at its current rate, I believe we could see a price of $54K around Valentine’s day. We could see a higher price than this by the end of Q1; $74K is also on my radar. However, I have the sense a pull back from $54K would leave the Bitcoin price to consolidate around $35K. Based on previous cycles we could be in for a year or so of extreme bullishness. In the adoption cycle I believe Bitcoin is heading into the early majority segment which is characterized by steep growth, so this bull market could last a while longer than previous cycles. With all cycles, the crash comes from the madness of the crowd, there won’t be a catalyst news story, the market will just run out of buyers. Remember the old wall street adage: “When the shoe shining boy is giving you stock tips, it’s time to get out”. The point being that the masses of retail money are usually the last to enter the market, and offer a warning sign of potential downturns.”
Pelecanos believes the latest bull run will boost the prospects for a Bitcoin ETF. Last week, Van Eck filed an S-1 seeking approval to launch a crypto ETF.
“With the continued narrative of Bitcoin as an inflation hedge also driving momentum, it is a case of when rather than if such an ETF will be created. With clearer regulation and more institutional players entering the space, the biggest hurdle in the way of an ETF is being able to quote a real price of Bitcoin and having it free of manipulation. As more Bitcoin is traded on regulated exchanges we will trend towards a real, fair price for Bitcoin to make such a possibility a reality.”
Craig Russo, Director of Innovation at Polyient, thinks that Bitcoin has entered into a new phase of price discovery due to institutional interest:
“We have not yet seen peak retail participation, as highlighted by the low search and social activity relative to 2017. Retail participation, coupled with accelerated institutional participation, will likely continue to drive the bull market in Q1. Bitcoin successfully cemented itself as a legitimate asset in 2020 and will continue to be adopted across the financial industry, regardless of any positive shift in the traditional global economy.”
Russo believes that XRPs loss is Bitcoin’s gain as money flees Ripple’s crypto for a more secure asset:
With the removal of XRP from most major cryptocurrency exchanges with United States users, we believe that there will be substantial capital outflows into Bitcoin and Ether. Ultimately, this should add further fuel to the ongoing rally. We are beginning to see publicly traded corporations adjusting their treasuries to adopt Bitcoin as a reserve currency. Ultimately, this is driving massive interest and demand among institutions as they position for a broader adoption of this approach.”
Russo predicts that the Bitcoin bull has room to run through the first half of 2021.
“There will be high volatility during this period and we anticipate negative price action periods, as seen with other Bitcoin price discovery events. Despite the price rally, the Bitcoin market is still very thin and there is potential for enormous volatility if BTC whales begin to dump. This is always a lingering threat as any movement in the genesis wallets will definitely shake investor confidence. However, right now we aren’t overly concerned as this is a low-likelihood outcome given the nature of these wallets.”
Rachid Ajaja, CEO and Founder of AllianceBlock, predicts that Bitcoin will top at around $50,000 to $60,000 during Q1 2021:
“Bull runs usually last for around 3 years, so we can probably expect it to be 2023 before we see massive corrections. Any kind of crash is likely to be outside the sphere of macroeconomics, or potentially as a result of an issue with miners or dramatic overpricing that needs correcting. Any crash we do see will not be as drastic as those that we have seen before, thanks to increased network effects and institutional involvement. Gold is not as important as it used to be. We live in a digital world and bitcoin can do everything gold does except more effectively as a divisible store of wealth, as it is easier to both store and transfer.”
Ajaja says that Bitcoin whales won’t be selling anytime soon, thus constricting supply.
“Bitcoin is experiencing a supply shock at the moment, and miners can’t keep up with demand. For this reason, it’s unlikely that any whales will relinquish BTC liquidity until the price is closer to $100k+.”
Ajaja predicts a Bitcoin ETF this year, or next, especially with the Biden administration taking over the government:
“The introduction of an ETF would make bitcoin much more accessible for institutional investors, while also increasing the legitimacy of Bitcoin as an investment in the eyes of a wider audience.”
Konstantin Richter, CEO and Founder of Blockdaemon, says the latest surge is due to several factors: institutional money, inflation and Bitcoin halving:
“The halving means that 300K Bitcoin will be minted this year, compared to 600K in previous years. Since a significant portion of existing Bitcoin is illiquid, 300K is far too little supply for the exponential demand coming from institutions and triggered by the global covid crisis (new financial assets are needed to hedge against inflation). This represents an example of the flywheel in motion–half the supply and a probable doubling in demand, which in turn drives further demand due to price increases. Bitcoin cycles are inherently unpredictable: regulatory changes in certain key countries could have a significant effect–specifically those driving institutional interest like the US. As well as that, it is difficult to predict the behaviour of crypto whales who can influence price and might put a damper on the current flywheel. That said, I believe the next big hurdle for Bitcoin is $50K. Between $30-50K, there may be a significant amount of asset liquidation, so I think that will be a harder number to achieve this year. With that hurdle cleared, I believe that we will see $100K in 2022.”
Seamus Donoghue, VP Sales and Business Development of METACO, believes the Bitcoin bull is just starting to gain traction:
“I believe Bitcoin will be in the target range of 100K by Q1 2022. The current narrative is digital gold and the first major milestone will be matching the market cap of the physical gold market–$11-12 trillion. An equivalent BTC market cap would mean a BTC price of $550,000 to $600,000. This would however only be the first milestone as we expect two broader narratives to increasingly emerge: firstly, the institutional allocations out of fixed income into Bitcoin. The fixed income market with roughly $17 trillion in negatively yielding debt would be better referred to as “fixed loss”. The typical 60/40 equity and bond allocation is no longer fit for purpose given the negative, or near zero yield of the bond allocation–government bonds no longer insulate the overall portfolio from the typically higher risk of equity holdings and instead introduce an asymmetric risk of capital loss. The second narrative is that of Bitcoin as the new emerging non-sovereign internet native payment solution–the internet of value. Both of these narratives could drive Bitcoin’s capitalisation into the multi trillions. The trajectory will not be a straight line and Bitcoin will see 10-30 percent retracements along the way but a crash (as we saw in 2018) is no longer in the cards.”
Donoghue also sees the collapse of XRP helping Bitcoin too:
“… if the SEC’s legal challenge against Ripple had taken place in 2017, the news would have crashed the entire crypto market and we would have seen a flight of capital out of crypto. It is a sign of the market maturing that despite the SEC`s pursuit of XRP, the total crypto market cap has risen continuously since the news broke–with BTC leading the market. Instead of running away from crypto XRP holders have switched into more credible cryptos such as Bitcoin, Ethereum and Polkadot.”