Earlier today, on December 27, the bitcoin price surged to $16,500, recording a major gain for the first time since December 22, prior to Christmas.
Analysts including John McAfee and cryptocurrency hedge fund co-founder Ari Paul expressed their optimism towards the short and mid-term growth trend of bitcoin, given its latest momentum and overall increase in value throughout 2017.
“As I predicted, Bitcoin is rebounding and rapidly climbing after Christmas. It is still, by far, the best long term crypto investment, and I firmly stand by my prediction of $1 million by the end of 2020.”
Historically, bitcoin has demonstrated a tendency to recover soon after a large correction and work up to an all-time high price within a few weeks. Hence, bitcoin’s speedy recovery after Christmas was expected by most investors in the cryptocurrency market.
However, McAfee’s $1 million bitcoin price prediction by 2020 is noteworthy because other investors such as Overstock CEO Patrick Byrne and Mike Novogratz have suggested a similar figure. Analysts believe that once the market valuation of bitcoin surpasses the trillion dollar mark, it will be able to surpass the market valuation of traditional assets like gold and eventually penetrate into the global offshore banking market.
Byrne said earlier this week:
“We have all these currencies since Bretton Woods, fluctuating against each other, and maybe the dollar hasn’t gone to zero against these currencies but all of them have gone down 95% … versus something that they can’t control like … gold and bitcoin. So bitcoin may be on its way to a million for all we know.”
Investors in the cryptocurrency market are anticipating a variety of factors and events to lead to a bitcoin price surge. The filing for 8 bitcoin exchange-traded funds (ETFs) by the New York Stock Exchange (NYSE) and the Chicago Board Options Exchange (Cboe) for instance is expected to bring many billions of dollars into the bitcoin market.
Given the success of the futures exchanges of Cboe and CME, experts state that the probability of the US Securities and Exchange Commission (SEC) approving the ETFs of the two institutions is very high.
“Given the success of the launch of our bitcoin futures, several partners are very interested in moving forward with the development of an exchange-traded product,” said a Cboe spokesperson.
Another major factor that could drive the price of bitcoin up significantly is scaling. Currently, it remains unclear whether the Bitcoin Core development team and the community will initiate a block size increase to eliminate congestion on the Bitcoin blockchain network.
The majority of bitcoin users are paying fees in the range of $3 to $5 per transaction. Such high fees disallow users from making payments below $30. Wallets like Blockchain and Coinbase, two of the largest platforms in the market, are recommending a fee of 120 bytes per transaction.
But, innovative scaling solutions in 2018 could enable users to process payments with fees under $1. Notably, solutions like Lightning with SegWit, possibility block size increase, and other second layer solutions could provide efficient scalability.
Last modified: May 21, 2020 11:22 AM UTC