Rose to prominence after the global economic recession of 2008, bitcoin, is standing at $5943 at press time, after showing a 4.12% increase in its price during the past 24 hours. With bitcoin showing a major bullish trend over the past month, everyone is now wondering where the asset will end up from here on, both short-term & long-term.
Peter Brandt, who is one of the well-renowned commodity traders, recently tweeted the asset short-term price prediction as:
Just an opinion — there is a chance $BTC is topping here, having met its price target at key resistance. A correction could occur before another move toward 6500, then a more significant correction. pic.twitter.com/woetnihqB5
— Peter Brandt (@PeterLBrandt) May 4, 2019
After the bull-run that bitcoin saw in 2017 while almost touching the $20,000 mark in December, months of bearish activity was shown by it resulting in the loss of a large amount of investor money until just recently, as bitcoin broke its months of inactivity as it surged past the $5,000 mark at the start of April. The following graph shows the trend shown by bitcoin since April’s start till. It is a strong upward trend overall with minute hiccups in between.
Another trader that goes by the username of “@CryptoCato” on Twitter also just recently gave his analysis regarding bitcoin’s price tweeting:
$BTC weekly is sexy. The last time we closed a weekly candle at this RSI level (63), the price was roughly $13,500.
$6,750+ incoming? ? pic.twitter.com/crBrZJpwth
— catonaut (@CryptoCato) May 5, 2019
As a result of this bullish trend, investors are now eyeing the $6,500-$6,750 marks to be achieved for bitcoin’s short-term success. But what is being thought of it in the long-term perspective?
John McAfee, who is a world’s well-renowned crypto permabull and cybersecurity expert, recently commented on bitcoin price prediction of hitting $400,000 in two years tweeting:
Bitcoin over $400,000 in two years??? Anyone who can add and subtract, and who has even the slightest comprehension of point-set topology, knows, absolutely, that it can’t be less than one mil within two years. Does no-one study math anymore?? WTF people?
For medium-term and year-end predictions, many predictions are floating around. Here are some of them:
- “After a long bear market, we will see some life come back on the heels of increasing regulatory certainty and adoption. At year’s end, I see Bitcoin at $8200.” – Kyle Asman, Co-founder & partner BX3 Capital
- “I believe the bull market has kicked in in the crypto space and the price of bitcoin will finish the year around $10,000.” – Henry Stanley, Chief Executive Officer ICOAxiom.
- “The industry is bigger than ever, it is more professional, more serious and the image has improved. The next run will come and this time it will be more intense than ever. BTC represents the whole industry and I am very bullish on it. I think there will be another correction and from there I see $50,000 as possible in 2019.” – André Bruckman, CEO & Founder Mycro
But in order to understand the logic behind these price expectations, the need is to look at the factors that control bitcoin’s price. The bitcoin world is currently scarred with extreme price volatility that makes this asset a highly unviable to do payments. One day the market is seen shooting up and the very next day it is down on its knees showing major reds.
The overall market capitalization of bitcoin is around a hundred billion dollars, a figure that is much less than the trillion dollar market caps of big financial institutions. The biggest advantage of this small market capitalization is taken by whales, factors with huge buying and selling power in the space. Whales use pump and dump strategies to artificially maneuver the price of bitcoin in their own favor. By flooding the market with surplus bitcoins or by buying huge amounts making bitcoin supply shortage, prices are controlled artificially. But overall, the bitcoin price is still largely maintained by speculation.
Bitcoin has no physical backing of gold or any other commodity or asset. The price is simply maintained by speculation, people believing that the digital asset carries value and will be worth something in the future. Some people join this space due to pure FOMO (fear of missing out) while some leave this space based on the uncertainty and illegal usages associated with this nascent area.
Overall, while proponents of this space regard it as a viable investment option, people of conventional business mentality general don’t warm up to the idea of bitcoin. The uncertainty, frauds, illegal activities and the lack of regulation linked with bitcoin and cryptos make them highly unattractive in the eyes of the general public and the institutional investment community. One of the prime examples in this regard is Warren Buffet, who recently called bitcoin a “gambling device”. He said:
It’s a gambling device… there’s been a lot of frauds connected with it. There’s been disappearances, so there’s a lot lost on it. Bitcoin hasn’t produced anything.
Despite all the reservations, bitcoin’s price is still a thing of interest for the investors and traders in the traditional financial space. Even if there are negative elements linked with bitcoin, the future might see it emerge as the global currency as developments are made in both legislative and technological fronts. Of course, nobody wants to pass on a ‘once in a lifetime’ earning opportunity if it arises. The bitcoin bull-run of 2017 resulted in many becoming millionaires and the subsequent months saw many lose huge amounts of money as well. It’s too early to give a final verdict. Only time will tell what makes of this space in the long run, for now, everyone is just focused on its price.