His projection of the bitcoin price comes after major financial institutions and technology conglomerates in the likes of Rakuten, Fidelity, Etrade, and TD Ameritrade have started to build services and infrastructure around the crypto asset market, with JPMorgan going as far as to develop its own digital asset.
According to Chu, the story of bitcoin is becoming a reality ten years since its inception.
A growing number of investors are beginning to acknowledge bitcoin as an established safe haven and a non-correlated asset that operates in a market which regulators have begun to provide oversight in.
The adoption and perhaps the introduction of regulatory frameworks in countries like the U.S., South Korea, and Japan have led institutions to become more comfortable in providing services in the crypto market.
In recent months, Fidelity, Etrade, and TD Ameritrade amongst other institutions have been building an infrastructure to provide bitcoin custodial services to clients, further solidifying cryptocurrencies as an emerging asset class.
“I think ten years out from the bitcoin story, we’re starting to see a story become reality. And what people are seeing now is that cryptocurrency is not going away. And you don’t have to take my word for it, it’s Facebook, it’s Jamie Dimon, it’s Rakuten, it’s all who are getting in the space either by building infrastructure or providing services,” Chu said.
Year-to-date, the bitcoin price has surged 135 percent against the U.S. dollar, moving from around $4,000 to $8,700 within a six-month span.
As the bitcoin price continues to demonstrate momentum, Chu noted that it is likely to pull up the rest of the crypto market, sustaining the positive sentiment around the asset class amongst investors.
Bitcoin is the biggest brand, it is the massive elephant in the room and it definitely has the center of gravity that many other cryptocurrencies benefit from. It is going to pull up the rest of the market.
In essence, the main factors behind the projection of the bitcoin price reaching $30,000 by the year’s end are:
The upside movement of bitcoin could affect the momentum of alternative crypto assets or altcoins, some of which are seemingly making progress in developing utility.
Chu has said that some altcoins are developing utility and delivering on their own unique technologies as seen in the trend of Ethereum, which has consistently remained as the second most valuable crypto asset throughout 2019.
“But, in truth, many of the different applications that back cryptocurrencies of their own right are developing on their own story and developing utility. So these are the other altcoins that have their own large market caps like ether,” the investor said.
Although the infrastructure developed by major financial institutions would focus on bitcoin and bring more liquidity to the dominant cryptocurrency if altcoins demonstrate signs of growth through a consistently high level of developer activity, Chu said that altcoins could secure their own markets in the future.
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Last modified: June 14, 2020 11:17 AM UTC