An analyst at Saxo Bank said that he believes the bitcoin price could reach $100,000 in 2018 due to increased interest from institutional investors.
Kay Van-Petersen made waves in Dec. 2016 when he predicted that the bitcoin price could reach as high as $2,000 in 2017, representing more than 100 percent of upside from its level at the time.
Bitcoin needed less than half the year to reach that mark. After ripping past $2,000 in May, the bitcoin price continued to surpass even the most bullish predictions, and it ultimately ended the year close to $14,000.
Now, the Saxo analyst is upping the ante. Van-Petersen told CNBC that he believes the bitcoin price could reach $50,000 to $100,000 before the end of 2018 — an increase of 300 percent to 700 percent from its value on Tuesday morning.
“First off, you could argue we have had a proper correction in bitcoin, it has had a 50 percent pull back at one point, which is healthy. But we have still not seen the full effect of the futures contracts,” he said.
This rally, he said, will be fueled primarily by institutional investors, who have only recently begun to enter what has largely been a retail-driven market.
A variety of hedge funds and venture capital firms began investing in bitcoin last year, most notably Peter Thiel’s Founders Fund.
US exchanges CBOE and CME also launched the first regulated bitcoin futures contracts available to Wall Street investors, and fund providers have sought (thus far unsuccessfully) to gain regulatory approval to use these contracts as the basis for exchange-traded funds that track the price of bitcoin (Bitcoin ETFs).
Despite these bullish developments, the bitcoin’s heated rally has cooled in recent weeks. Since the beginning of January, the bitcoin price has declined by more than nine percent, and it currently sits approximately 40 percent below the all-time high it set on Dec. 17.
Van-Petersen is not concerned. He said that bitcoin often consolidates at a lower level before breaking out to new highs.
“I wouldn’t be surprised if it’s something we are seeing,” he said. “It’s kind of building a foundation, then will re-rate a bit higher.”
Despite his bullish outlook on bitcoin, Van-Petersen believes that ethereum will be the true headliner of this year’s cryptocurrency market rally.
Arguing that ethereum has a “more unified leadership than bitcoin,” he said that he believes ethereum will scale more quickly than bitcoin.
This, he said, will further increase the number of transactions made across the network, ultimately enabling ethereum to outperform bitcoin’s year-over-year performance.
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