Amid the bitcoin hype, major crypto influencer, Pomp is now predicting that the asset will touch the might $100k mark by the end of 2021, a prediction that will surely send ripples out in the entire financial world. If it turns out to be a reality, the landscape for cryptos will change completely, threatening the entire banking system to an even bigger level than now.
In an interview with BloxLive.tv, he said:
In August of last year I predicted bitcoin would go down to $3,000 before returning to $10,000. It essentially did that […] Now I think it’s going to $100,000, but […] there will be more volatility: there will be parabolic runs like we saw in June and then there will be 20-30% drawdowns from that. Along the way a lot of people will call the top at these local highs — they’ll be incorrect.
Bitcoin has been gathering a lot of attention from the financial world owing to its recent price spike. Rising from the lower $4,000s at April’s start, the digital asset is now boasting a staggering $11,374 while showing a 1.42% increase in the past 24 hours alone.
Anthony Pompliano, or “Pomp”, as per his Twitter handle, is one of the most prominent proponents of bitcoin in the crypto finance world. He is the co-founder of crypto asset management firm Morgan Creek Digital and hosts a podcast oriented around the bitcoin and blockchain world, called “Off The Chain“.
Pomp has been pretty supportive of the asset in the past. His voice also holds a lot of weight and influence in the crypto community. Pomp taking such a bullish stance for bitcoin will certainly spin a few pens in the institutional area as well.
The reasons behind the prediction seem to be pretty valid in a holistic picture. Firstly, there is an important event of “bitcoin halvening” that is coming next year in May. It will result in cutting the current mining rewards to half which will mean the supply of newly-minted bitcoins in the market will get reduced overall. Based on the simple supply-and-demand market mechanism, a reduction in supply would result in a natural spike related to price.
On the other end, bitcoin has been progressing on both technological and legislative fronts over the past few years. Progress is being made to make the uncertain and volatile space of cryptos more regulated.
With regulation, it is expected that an aura of credibility will surround both bitcoin and the cryptocurrency world overall, resulting in an increased trust from the institutional end as well. With this, huge capital will likely flow into the bitcoin world taking its price further up. Increased exposure and increased trading volumes, as a result, will also act as a cushion to push the price up.
This big prediction of bitcoin touching $100,000 by the end of 2021 is still not as big as the one made by the renowned cybersecurity expert John McAfee. He said:
When I predicted Bitcoin at $500,000 by the end of 2020, it used a model that predicted $5,000 at the end of 2017. BTC has accelerated much faster than my model assumptions. I now predict Bitcoin at $1 million by the end of 2020.
Speculation is a major factor controlling the bitcoin price overall. Since there is no physical backing of the asset, its price is always prone to major fluctuations. A positive sentiment in the market thus helps bitcoin gain more adoption and hence a consequent price increase.
Over the past few years, there have been many events that have been establishing a positive image of the crypto space overall. Facebook recently announced its own cryptocurrency, Libra, which has consolidated bitcoin’s potential as a global currency by establishing trust regarding cryptocurrency, a space generally thought to be untouchable.
Besides, the adoption of blockchain has also been on the rise as big companies like Pepsi, Walmart, IBM, Microsoft etc. are already experimenting with this tech. Events like ConsenSys and Blockchain Weeks across the globe are establishing a more progressive image of the crypto space.
When it comes to the possibility of bitcoin hitting these landmark prices of $100,000 and $1,000,000, it surely is there. But keeping in mind the uncertain and volatile behavior of bitcoin’s past, nothing can be said for sure. Lack of physical backing makes sure anything can happen when it comes to bitcoin’s price as it is always treading on the thin ice of speculation.