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The Bitcoin mania is back, and with it the return of soaring predictions from famous crypto fund managers to Wall Street stalwarts about where it can go next.
The world’s largest digital currency is in the midst of a lush rally that this week saw it cross above $ 18,800 for the first time in nearly three years. Strategists and cryptocurrency fans are now rushing to project their next never-before-seen heights. Outside of the everlasting “moon” pronouncements from Twitter experts, forecasts range from $ 25,000 to more than $ 300,000 by the end of next year.
Here’s what helped Bitcoin’s run: A warmer embrace from companies like Fidelity Investments and JPMorgan Chase & Co. is often cited as a catalyst, as is PayPal Holdings Inc.’s decision to allow its clients to access. cryptocurrencies. Then there is always the FOMO, or the fear of missing out, as prices go up. For crypto evangelists, these developments are only the first junctures on the road to ubiquity.
“All of a sudden you have this near-perfect backdrop that not only lends validity to the asset class, but also really demonstrates its staying power,” said Michael Sonnenshein, managing director of Grayscale Investments, which operates the largest cryptocurrency trust. publicly traded. It’s “once again showing investors, no matter how many times you’re challenged, that you have a way of coming out almost stronger or showing your ability to be really, really resilient.”
Amid Bitcoin’s Euphoric Run This Week, Fundstrat Global Advisers Strategist David Grider raised his target price for the end of 2021 to $ 25,000 from $ 16,500, or about another 40% higher than Friday’s closing price.
Grider is based on an internal model that analyzes valuations and takes into account the prices of cryptocurrencies. In 2017, when Bitcoin rose to close to $ 20,000, its all-time high, its frame showed that the coin was in an “incredible bubble.” He says he got that call right and is confident his model will work this time too.
“History doesn’t repeat itself, but it rhymes,” said Grider, the company’s head of digital asset strategy. “The audience is bigger, the market is bigger, it’s a little more institutionalized, there are different fields of capital coming in.”
To be sure, Grider’s forecast sounds familiar to crypto veterans. Fundstrat co-founder Tom Lee had started 2018 with a year-end price target of $ 25,000, before eventually dropping the time frames for his predictions in December, when it was in the $ 3,000 to $ 4,000 range.
Still, crypto fans are citing many reasons why it may continue to work this time. Famed billionaire investor Mike Novogratz says he sees “tons of new buyers” amid “low supply.”
Novogratz, who is the founder of Galaxy Digital, has not been shy with his views on Bitcoin and this week he said that he sees it reaching $ 65,000. His comments came via Twitter in response to a question posed by “Game of Thrones” star Maisie Williams, who asked her 2.7 million followers if she should invest in the coin. (She did.)
Bitcoin would need more than three times as much to reach Novogratz’s goal. In November 2017, the former hedge fund manager had predicted that the coin would hit $ 40,000 by the end of the following year, only to see it finish below $ 4,000.
The most optimistic major projections are those that see Bitcoin reaching $ 100,000 or more. Tom Fitzpatrick, a strategist at Citigroup Inc., caused a sensation this month when he said that crypto could hit $ 318,000.
The surge in forecasts has observers warning that the volatility that has been a hallmark of Bitcoin since its debut more than a decade ago is likely to return.
Edward Moya, a senior market analyst at Oanda, recalls attending a cryptocurrency conference in 2014. At the time, Bitcoin’s price was hovering around $ 600 after jumping the previous two months. And everyone, he says, was speculating about how high it could go. The event, and others like it, reminded him of the early days of the Wild West in forex markets.
“Cryptocurrencies have come a long way,” he said.
But Moya is skeptical that this race can continue – he points to the last time crypto fans overestimated a Bitcoin rally. “Today’s outlandish calls seem to be largely based on impulse mania,” he said. “I doubt that institutional traders will allow Bitcoin to only go in one direction.”
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