Bitcoin’s price has been on a tear lately, having risen to a new all-time high of almost $19,000 last week, last seen during the peak of the 2017 bull market.
As BTC works on beating an all-time high, the sky-high predictions have made their return.
With Fidelity Investments, JPMorgan Chase, PayPal, and BlackRock embracing the digital asset, the FOMO continues to push the cryptocurrency price higher.
At $18.5K #Bitcoin Google searches for “bitcoin” have not seen an uptick. This is not a FOMO rally. It’s steady hands. Few understand this.
— Cameron Winklevoss (@cameron) November 22, 2020
“You suddenly have this nearly perfect backdrop that is not only lending validity to the asset class, but is also really demonstrating its staying power,” said Michael Sonnenshein, managing director at Grayscale Investments. According to him, Bitcoin is,
“once again showing investors no matter how many times it gets challenged, that it has a way of emerging almost stronger or demonstrating its ability to be really, really resilient.”
History doesn’t repeat, but it rhymes
Amidst this bull run, David Grider, the head of digital asset strategy at Fundstrat Global Advisors, has increased his price target to $25,000 by the end of 2021 from $16,500.
Fundstrat co-founder Tom Lee made a had started year-end price target of $25,000 in 2018 only to abandon it after BTC hit its bottom in the bear market at $3,200 in December.
For Grider, “History doesn’t repeat, but it rhymes,” and now “the audience is bigger, the market is bigger, it’s a little more institutionalized — you have different fields of capital coming in.”
My current base case is a blow-off top in the coming months somewhere between 25k and 50k (huge range obviously to illustrate the uncertainty). Not my preferred case but the institutional FOMO and the supply inelasticity make this a fairly likely scenario.
— Qiao Wang (@QwQiao) November 22, 2020
Crypto’s resident bull, Mike Novogratz, the founder of Galaxy Digital, known for making some wild predictions just last week, said that BTC would reach $65,000 as Novogratz sees “tons of new buyers” amid “little supply.”
As we reported recently, Tom Fitzpatrick, a strategist at Citigroup Inc., said the flagship cryptocurrency could reach $318,000.
Institutional Momentum Mania
Up 170% YTD and 35% month to date, If all institutions were to assign 1% to 5% allocation to Bitcoin, it could rise “to somewhere in the $400,000 to $500,000 range,” said Catherine Wood, CEO of ARK Investment Management during the Virtual Investing in Tech series of Barron’s.
According to her, this time is different for one big reason – the involvement of institutional investors. A noted booster of disruptive technologies such as Tesla and Bitcoin said the digital asset is “equivalent to the dollar in the fiat currency system. That’s a pretty exalted role.”
Tesla started its bull run on October 2019. A month later, by November 21st, it was 10% from its prior all time highs.
Just like bitcoin now.
— Alex Krüger (@krugermacro) November 22, 2020
However, according to Edward Moya, a senior market analyst at Oanda, “Today’s outlandish calls seem primarily based on momentum mania,” adding, “I doubt institutional traders will allow Bitcoin to only go in one direction.”