Despite Odds, Experts Talk Of A $20,000 Bitcoin Price In Six Months
The cryptomarket cannot be said to have overcome its bearish trend and the space is still reeling in the unfortunate claim by Chinese billionaire, Li Xiaolai, that some big names in China’s cryptocurrency space are scammers. However, two market experts have maintained their reasons for Bitcoin to hit a $20,000 price or more by the end of 2018.
At a current $6,554, Fundstraat’s Tom Lee says that Bitcoin is still set to reach the over $20,000 range as earlier estimated. He told CNBC that Bitcoin has traded historically at a two and half times its mining cost hence there is no question that the price will not hit the estimate by year end.
“…given where mining cost would be,” Lee says on CNBC’s Fast Money, “and applying the historical average of two and a half times mining cost, that would imply for a value of over $20,000, roughly $22,000. We still think Bitcoin could reach $25,000 by the end of the year or something like that but it’s still a huge move from where it is now.”
The CEO of ADVFN, Clem Chambers, shares a similar view that Bitcoin may hit $20,000 again. He told Express.co.uk from the CryptoCompare MJAC Blockchain Summit that cryptocurrencies are filling the vacuum created by the shortage of actual money in the world. “Because that’s an economic suction going on there and the cryptocurrencies are filling that vacuum. It will generate an economic lift,” Chambers says.
Lee buttressed his claim with the fact that from an historical perspective i.e. based on its 10-year history, Bitcoin’s price usually moves – 35% of the time – more than triple over a six month period. He also added that Bitcoin had had a positive return in nearly a 100% instances within a six months timeframe whenever it trades below mining cost as it is the case presently. He says:
“So I think the risk reward is still very isometrically positive for Bitcoin…but it is, in its entire history, it’s always been a good time to buy below mining cost.”
He notes that when compared to Ethereum for the rest of the year market outlook, the investment case for Bitcoin is a bit easier because it is a store of value and it has a long history. He also believes that Bitcoin is likely to do better than the S&P before 2018 is out.
Both comments are coming at a time when there are doubts that cryptos would gain much future market volume in coming days especially with unexpected reports that electronic payment company, Square, has withdrawn its application to get into the banking industry. Though it hopes to refile after revising its application, the approval would have enabled Square provide investors in the US with the opportunity to gain access to cryptos via the banking system. Also on another negative note, an updated index of the top 28 cryptocurrencies and assets published by the China Electronic Information Industry Development (CCID) Blockchain Research Institute shows Bitcoin blockchain now ranked on the 17th position while EOS, Ethereum and NEO are on top.
Nonetheless though, the hope seems to be beaming around. In its July Cryptocurrency Predictions Survey, price comparison site finder.com, suggests that Bitcoin will hit US$7,247 by 1 August 2018 as other coins gain too. Its Bitcoin price prediction for the end of the year is $15,372.
Should Lee and Chambers’ outlook come to be true, it would mean that the top digital currency will be hitting its all-time high in 2018. In the meantime, the market looks forward to the escalation of a tit-for-tat tariff dispute between China and the U.S. and how it will likely reflect on the price of Bitcoin in coming days or for as long as a full-blown trade war harms global economic expansion.