Bitcoin is rallying once again after suffering a small stutter in the final week of June. The price of the flagship cryptocurrency is hovering around the $13,000 mark once again, and not surprisingly, the bulls are out in full force with their big bitcoin price predictions.
Bitcoin permabull Anthony Pompliano told Yahoo! Finance’s The Ticker in an interview that the price of the crypto asset could “eclipse” the $100,000 barrier by 2021.
Pompliano said during the interview that bitcoin will shatter his six-figure price target in just over two years thanks to the cryptocurrency’s demand-supply dynamics. He said:
“I think by the end of 2021 we’ll see it eclipse $100,000,” Pompliano said. “The important thing to remember about bitcoin is that it’s a fixed supply asset and so supply and demand economics apply. If there are increases in demand, you’re going to see the price move up.”
The co-founder of Morgan Creek Digital added that the launch of Facebook’s cryptocurrency wallet Calibra could prove to be a trigger for bitcoin adoption. Pompliano believes that Facebook’s wallet will go on to support other crypto assets including bitcoin, thereby boosting demand for the digital asset. According to Pompliano:
“It’s really bullish for the digital currency in the sense that the more important part of the announcement is not Libra, it’s Calibra, which is the digital wallet that Facebook is reportedly going to give to hundreds of millions of people, if not billions of people.”
“That wallet I think will eventually support bitcoin, ethereum (ETC-USD), tokenized securities and even data, so you can imagine something like your medical health records being tokenized and held in that wallet. I think it’s really important moment where we give hundreds of millions of people the capacity to hold crypto currencies.”
Pompliano makes a good point here as Facebook had over 2.38 billion users at the end of the first quarter of 2019. If the social media giant’s wallet is adoption by even a tenth of those users and it really supports bitcoin, the demand for the same should ideally increase.
As only 21 million bitcoin tokens can be mined, its value should increase as demand rises. But at the same time, one shouldn’t forget that the availability of bitcoin is going to be way below 21 million thanks to lost tokens.
At least 23% of the bitcoin tokens have reportedly been lost. That isn’t surprising as people have been known to lose millions of dollars worth of private keys. Assuming that we will never see a fifth of the bitcoin in circulation anymore, then the supply side of the equation will worsen. Moreover, the bitcoin halving event that’s expected to take place in May 2020 will further reduce its availability.
In all, a dearth of bitcoin tokens and rising interest from institutional and individual investors alike will create a supply crunch and send the price of the crypto asset higher.
Institutional investors such as hedge funds have been pouring more money into bitcoin this year. If Facebook’s Calibra wallet actually supports the flagship cryptocurrency, then don’t be surprised to see more individual investors joining the fray.
Anthony Pompliano has doubled down on his $100,000 bitcoin price target in the space of just a few days, suggesting that the digital currency could rally more than 660% from its current levels in just two years. Now that would make for a terrific investment, but expect pullbacks and pitfalls along the way and rely on your own research before buying into such aggressive price targets.
Last modified: June 23, 2020 2:46 PM UTC