“I don’t care if its a penny today, it’s going to be 2 million dollars very soon…What’s happening in the market has nothing to do with the reality of its value.”
One of the renowned personalities in the crypto world John McAfee recently made this statement in Anthony Pompliano’s podcast “Off the Chain”. So, is the decentralized peer-to-peer currency that rose after the economic crisis of 2008 heading towards this $2 million mark? As it happens, this seemingly impossible thing might just turn out to be real.
At the time of writing this report, bitcoin stands around $5,254 after rallying up in the past week. The following graph shows the drastic uptick that the digital asset observed in a few days.
Despite the reason for this price spike being uncertain some are attributing it to the high trading activity in the futures market of bitcoin. Increased interest in the asset by the investor community has caused the value of the asset to rise up owing to the simple supply and demand mechanism.
A crypto analyst and ethereum trader that has a Twitter handle “ScienceGuy9489” is now predicting that bitcoin breaking the $5,260 resistance level will cause another bull run of the market. He tweeted:
#BTC breaking out above $5,260 will cause another bull run. #ETH, #LTC, #XRP, #XLM, and other #cryptocurrencies are being held back by this. Expect big gains there when this #Bitcoin resistance is broken (and sustained). This is the weekly chart, a good long term indicator. pic.twitter.com/KkjzXgjDPu
— ScienceGuy9489 (@ScienceGuy9489) April 9, 2019
In the past, we have seen the asset break out all of a sudden in terms of its price. The famous bull run of 2017 saw the asset almost touch the $20,000 mark. Bitcoin is one of the most volatile assets in the modern financial world. Its price breakout from here to $2 million is certainly a possibility. There are certain aspects that can push this asset to achieve this feat.
Regulation has been largely missing from the bitcoin and crypto world, resulting in investor community and general public largely holding back. Lack of regulations is also hurting the asset in terms of lack of institutional funding. Big corporations and large financial institutions hold back from the bitcoin world owing to the issues like manipulation, frauds and scams. A large amount of institutional money is thus sitting on the sidelines for now. But once regulatory clarity is obtained and establishment of an exchange-traded fund (ETF) linked to bitcoin take place, a large amount of institutional money is expected to flow into the bitcoin world raising its market capitalization and value. Increased market capitalization will also help lessen the price manipulation by large whales through pump and dump strategies.
In order to reach the $2 million mark, bitcoin needs to gain more adoption worldwide, both among institutions and general public. Right now, the major connotation attached to the asset is negative owing to the issues like money laundering and illegal usage. For the asset to attain a price of $2M, it needs to establish a more positive vibe. Besides, the need of the hour is to provide people with opportunities and services to spend bitcoin in the real-world for everyday activities. As the asset is poised against banking, it needs to cover every aspect in terms of custody, profit, daily usage and others. Once public adoption of bitcoin increases, there is a strong possibility that the asset will achieve its highest price value.
As of now, a lot of countries have banned bitcoin. This is a huge bottleneck along with a lack of regulatory clarity. Once regulatory clarity is achieved with countries legalizing it, the value of bitcoin is expected to shoot up significantly. The following tweet by cryptoanalyst Ronnie Moas gives one a rough idea of this year’s probable end for the digital asset:
Sad to watch the top 1% scare the crap out of you | separating you from your $BTC #bitcoin & keeping the gap between rich & poor | Reiterating $28,000 target for end-2019 | Do Not take a bet you can’t afford to lose | I surround myself w/ #brightest minds & they all agree w/ me
— Ronnie Moas (@RonnieMoas) September 9, 2018