Since peaking at $13,900 in June, Bitcoin has fallen by 25%, managing to lose the support of bulls after a rally form $3,150. Yet, industry insiders are still abundantly bullish.
Speaking with Yahoo Finance in a recent interview, Bobby Lee, the founder of China’s first Bitcoin exchange and a brother to Litecoin’s Charlie Lee, explained that he believes that Bitcoin remains in a cycle that will take us to “higher and higher heights”.
The long-time industry entrepreneur even stated that “within a very short amount of time” (which he later defined to be a “few months, if not years”), Bitcoin will begin to start a massive parabolic trend once again. This trend, Lee proposes, could bring BTC to “$20,000, […] $50,000, $100,000, even $200,000”.
$50,000 BTC a When, Not If
While $100,000 or $200,000, even $50,000, seems like a crazy price target for Bitcoin, many analysts in the industry believe that the leading cryptocurrency eclipsing such a milestone is not an if, but more of a when.
Adam Back, the creator of the Proof of Work protocol that Bitcoin mining is based on, recently laid out a number of reasons why Bitcoin could hit $50,000 in the near future. They are as follows:
The May 2020 Bitcoin block reward reduction from 12.5 to 6.25 BTC per block: In May next year, the number of coins issued per block (every ten minutes) will be cut in half, resulting in a negative supply shock to the Bitcoin market.
Geopolitical uncertainty: Over the past few years, the world has become increasingly tumultuous in terms of geopolitical events. Venezuela has collapsed as a regime has managed to inflate away the local currency, leading to local adoption of Bitcoin and other decentralized forms of money. Argentina recently saw its incumbent president, Mauricio Macri, lose the primary election for the presidential seat, resulting in a collapse of the Argentinian peso and the local stock market. Hong Kong has been embroiled in massive protests, as China has been duking out a trade war with the States. These three cases are only one of many that show that the world is unstable, and needs safe haven assets, be that gold or Bitcoin.
$17 trillion worth of negative-yielding bonds: On Friday, Bloomberg reported that the negative-yielding bond situation has just developed. Their report, which cites the Bloomberg Barclays Global-Aggregate bond index, shows that $17 trillion worth of bonds is negative-yielding.
Modern Monetary Theory (MMT) becoming a popular trend: MMT, which is effectively an economic framework that says governments should heavily utilize fiscal policy to boost their economy, has become a popular trend in global politics. Many critics of the theory say it will result in mass inflation, leading to an increase in the valuation of hard monies, like gold and potentially Bitcoin.
Bring it on, 2020 halvening, lots of geopolitical uncertainty, $15tril of -ve interest bonds, MMT excuses being tested to bring an even more imprudent USD inflation regime.
Also, a price model from Twitter analyst PlanB, which has been accurate to a 95% R2, has shown that after the May 2020 halving, BTC’s fair market capitalization will swell to $1 trillion. This market capitalization translates to $50,000 per coin.