Bitcoin, the world’s largest digital currency, touched an all-time high of $64,600 on 14 April amid a surge in retail and institutional adoption. The demand for BTC has been on the rise for the last few months. The recent adoption of Bitcoin as a payment method has played a major role in BTC’s record price rally. Financial giants like PayPal and Visa enabled cryptocurrency payments recently and Mastercard revealed its cryptocurrency plans in February this year.
Analysts believe that $100,000 Bitcoin is inevitable this year due to the massive rise in demand and limited supply of the world’s most valuable cryptocurrency.
BTC Price Rally
Finance Magnates asked Maria Stankevich, Chief Business Development Officer at EXMO UK about her views on the recent BTC price rally and the possibility of Bitcoin hitting $100,000 this year. “I believe that the BTC will continue with the bullish trend. There are many factors for that, but I would name Paypal and Visa news as the most important ones. Needless to say, this should force adoption for these crypto assets beyond speculation. And, support from institutions like PayPal and Visa is making it easier to use crypto that pushes BTC price to a new ATH. The possibility of reaching USD 100,000 is very high in 2021. Firstly, the dynamics of bitcoin at the moment almost ideally corresponds to the dynamics of an asset with a scarce value and according to the popular Stock-to-Flow valuation model, the goal of 100,000 is possible already this year. The next factor is a high demand from institutional players, and big market influencers such as PayPal, Visa, Tesla, etc. And of course, 100,000 USD is a symbolic psychological mark (after 20,000 USD) which many investors are guided by,” She said.
Blockchain and Crypto Specialists
When asked about the lack of blockchain and crypto specialists in regulatory departments of different governments around the world, Stankevich said: “I believe that all today’s problems and crypto bans have their roots in lack of knowledge. Every day, I read some news where bitcoin is blamed for money laundering or anonymity while we all know that this is the most transparent system ever if we apply all the AML and KYC procedures. Politicians make statements not even knowing that there are such compliance tracking systems in place that traditional institutions didn’t even dream about! So it’s essential for governments to have people who not only understand the technology but also have a great experience in the market.”
Role of Supply and Demand in Bitcoin’s Price Surge
Jason Deane, Bitcoin Market Analyst at Quantum Economics highlighted the significant role of supply and demand in the recent price rally of Bitcoin. “In the simplest terms possible, the recent price changes are, as always, the result of the interaction between supply and demand. Since supply is absolute (at least in terms of production), the only variable in the equation is the demand side, and this has changed radically in the last six months. Microstrategy’s surprise Bitcoin purchase last August permanently changed the way that organizations, fund managers and high-level executives view the asset, especially for the anti-inflationary reasons cited in the accompanying press release and the concerns raised by the unprecedented levels of Quantitative Easing. It was, in our view, a strong and public endorsement of the asset and marked both the beginning of the end of the experimental phase of Bitcoin’s lifecycle and the beginning of the mass adoption phase, both at an institutional and retail level,” Deane said.
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$100,000 Bitcoin Level
While commenting on the $100K Bitcoin price level, Deane said: “For many Bitcoiners, however, $100k will be ultimately seen as little more than an interesting milestone on the journey to far higher values. This price is certainly achievable and will ultimately be driven by more of the same activity we’re seeing now, even without development and adoption rates increasing beyond where they currently are. In short, there may well be enough development already ‘in the pipeline’ to enable this possibility within the current cycle.”
Cryptocurrency Hedge Funds
Marc P. Bernegger, Founding Board Member of Crypto Finance AG, highlighted the recent growth in crypto hedge funds. “The crypto hedge industry is literally exploding right now and every week there are new managers joining the space. So far quite a few active fund managers seem to be able to generate a substantial and sustainable alpha and it will be interesting to see how space will evolve. There is still a lot of traditional money waiting on the sideline which hasn’t touched digital assets yet. A fully regulated US-based ETF is also insightful and will bring additional money into the asset class,” Bernegger said.
“Bitcoin is in a powerful position right now; it is crucial to zoom out and always look at the bigger picture – when you do- you can see that on the balance of probabilities, bitcoin should sustain this bullish momentum- the market is likely only warming up. We are at the base of where this cycle could take us. Critical drivers of $100K Bitcoin would be: FOMO- Fear of Missing Out, those who do not own bitcoin and other crypto assets will have the fear that they have ‘missed the boat’ and start investing as soon as they can (concerning this, the Crypto Asset market is still infant and around 1% of what it will be in the future) Adoption- more of the likes of Tesla and MicroStrategy purchasing bitcoin- this is a domino effect- the floodgates are starting to open. ETFs- being approved for bitcoin in Canada- US should be next. Shortage of bitcoin on the exchanges- which is driving up demand as there is lack of supply- simple,” Johnny McCamley, Founder of CryptoClear told Finance Magnates..
Coinbase, one of the world’s largest cryptocurrency exchanges, went public this week. Coinbase stock (COIN) received a reference price of $250 from Nasdaq but the price jumped nearly 30% within the first day of trading. COIN stock closed at $322 on Thursday.
“Coinbase IPO has increased the interest of investing in the cryptocurrency market. I think $100,000 Bitcoin depends if big bidders keep investing in BTC, but for sure it will have a value because people believe in Bitcoin as a main refugee asset,” Joaquim Matinero Tor, Banking, Finance & Blockchain Associate at Roca Junyent told Finance Magnates.