With global markets crashing and the broader economy on the verge of another great recession, it’s hard to visualize Bitcoin rallying, especially since it collapsed by 50 percent in a single 24-hour period in mid-March.
But top investors still see upside for the cryptocurrency, with one analyst eyeing a $100,000 Bitcoin price, which is 1,380 percent higher than the current market price of $6,750. Here’s why he expects BTC to appreciate this much.
Bitcoin to rally to $100,000?
Speaking with a commodities news site and bullion dealer, Kitco, Anthony Pompliano — co-founder of crypto fund Morgan Creek Digital Assets and an industry analyst — explained that despite the recent drawdown, Bitcoin is still on track to “rally hundreds of percent” to $100,000 in the coming years.
The exact prediction is $100,000 by December 2021, just over eighteen months from now. Backing this lofty forecast, he cited three things:
- Central banks are printing money en-masse: To stave off the negative effects of the coronavirus outbreak, central banks have begun to debase money en-masse through quantitive easing and low-interest rates. Analysts believe as the value of fiat decreases, Bitcoin should rise.
- The upcoming block reward halving: In May, the number of Bitcoin mined each day will get cut in half due to the so-called “halving.” This will reduce the amount of natural selling pressure placed on the BTC price by miners.
- Demand for Bitcoin is growing: As shown by the strong increase in demand for stablecoins, there is a growing demand for cryptocurrency, presumably due to the aforementioned two narratives and the search for new investments amid these stressing times.
These three factors, Pompliano explained, will work in tandem to increase the demand of Bitcoin in a time when the scarcity of the cryptocurrency increases, resulting in both a positive demand shock and a negative supply shock — two trends that should dramatically increase the price of the asset.
The math agrees with Pompliano
Indeed, per previous reports from CryptoSlate, pseudonymous analyst PlanB found that Bitcoin’s market capitalization over time can be plotted on a logarithmic regression, which has an R squared of 93 percent (was originally 95 percent but has since been adjusted down due to volatility), or extremely accurate in non-statistics lingo terms.
The model predicts that BTC will have a fair value of $55,000 to $100,000 — approximately ten to twenty times the current value — after the halving due to the emission shock.
Importantly, the model doesn’t predict when Bitcoin will see this rally, but it predicts a long-term growth towards the fair value.
At the time of press, Bitcoin is ranked #1 by market cap and the BTC price is up 8.11% over the past 24 hours. BTC has a market capitalization of $135.1 billion with a 24-hour trading volume of $48.58 billion. Learn more ›
At the time of press, the global cryptocurrency market is valued at at $209.55 billion with a 24-hour volume of $170.01 billion. Bitcoin dominance is currently at 64.47%. Learn more ›