Bitcoin price has recently seen extreme volatility, but it is likely to surpass $100,000 (roughly Rs. 73.65 lakhs) this year, a Bloomberg analyst said. Mike McGlone tweeted a chart that, he said, showed why Bitcoin can reach the $100,000 mark this year. The commodity strategist says Bitcoin is likely to make a “significant advance in 2021” as more people in the mainstream adopt the world's largest cryptocurrency. He believes if Bitcoin does rally to reach that unprecedented level it will also be because of past Bitcoin trading trends and its declining supply.
Bitcoin's volatile price
In recent times Bitcoin has had an extremely volatile year. It was initially listed on exchanges in 2011 and immediately attracted massive global media attention. Since then, the cryptocurrency has risen from its $10,000 range, but in 2018 it crashed to just below $6,000 in February. However, in April 2018, the Bitcoin price rose to a historic high, climbing as high as $9,000. It was mostly speculative in nature, and like stocks, cryptocurrencies were susceptible to news of trading manipulation. Bloomberg noted that with Bitcoin's increased volatility recently, many traders are selling it in order to profit from the rally in equities, and that is pushing down its price. Though, it added that the $100,000 figure that McGlone mentioned may come by the end of 2021.
Reasons to believe that Bitcoin will reach $100,000 by end of 2021
“I’ve been predicting a bull market for bitcoin since I argued in March 2016 it’s near all-time highs (it’s over $5,000). The chart below shows Bitcoin’s long-term bull trend and relative strength versus gold and the USD,” Mike McGlone said. “Let’s say I’m right and we go on a run this year,” the analyst continued. “Does this mean it will reach $100,000 by end of 2021? Not necessarily,” he said, and added: “(Bitcoin) had a monster bull market in 2017, it may be prone to something of a retracement in 2018.” How Bitcoin has maintained its $5,000 price level despite a plunge Mike McGlone explained how bitcoin has defied analysts' expectations to retain its $5,000-level price.
Future of Bitcoin
In an interview with Bloomberg TV’s Elisha Bessa, McGlone said, “Bitcoin is not going away in the next year or two. I think people are wondering what the future of Bitcoin is and I think one of the primary effects it’s going to have is, number one, the price of Bitcoin is going to continue to rise, and it’s going to make Bitcoin much more mainstream. I think there will be a tipping point with respect to how Bitcoin can be used for mainstream commerce and I think that will continue to rise.” McGlone also said that the “demand side” of Bitcoin’s transaction technology is “outstripping” its supply. Bitcoin transaction volume is increasing rapidly on a monthly basis and it is running into issues due to low fees. Low fees are generally not good for the adoption of blockchain technologies.
Bitcoin rose 1,397 percent in 2017 and about 81 percent from the beginning of 2018. The weekly trading volumes are said to be up 43 percent compared to the week prior to the exchange hack. While the increase in prices and trading volumes might suggest that Bitcoin is set to reach the $100,000 level in 2018, there are several factors that have to be taken into consideration before the extreme cryptocurrency rises become a reality.