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Bitcoin’s price could reach $ 300,000 (£ 225,000) next year, more than 16 times its current value, according to a leaked report from Citibank.
The cryptocurrency has undergone a huge surge in the past few weeks, going from around $ 10,500 in October to over $ 18,000 today. Until March, a bitcoin could be bought for less than $ 5,000.
It is currently trading at its highest level since late 2017, when it hit an all-time high near $ 20,000.
Other major cryptocurrencies have seen a recent surge as well, with ethereum (ether), ripple (XRP) and litecoin all up between 10 and 25% in the past week.
The bull run has been spurred by massive institutional investments, which have seen cryptocurrencies increasingly seen as a safe haven asset like cash or gold during times of economic uncertainty and stock market volatility.
This was evidenced by the title of the leaked Citibank report – “Bitcoin: 21st Century Gold” – which was written by the Wall Street giant’s global chief of technicians CitiFX, Tom Fitzpatrick.
“Bitcoin’s entire existence has been characterized by unthinkable rallies followed by painful corrections (the kind of pattern that supports a long-term trend),” the report said.
(CoinMarketCap)
First leaked to Twitter before being picked up by Forbes, the report analyzes previous price trends that saw bitcoin’s value multiply 555 times between 2011 and 2013 and 121 times during its last major run between 2015 and 2017.
According to Mr. Fitzpatrick’s calculations, we may currently be in the midst of the third major price rally in bitcoin history.
“This move could potentially peak in December 2021 … suggesting a move up to $ 318,000,” he wrote.
“Unlikely, however, that it looks like it would just be a 102-fold low-to-high rally (the weakest rally so far in percentage terms) at a point where the arguments in favor of bitcoin may be the most compelling ever.”
The persuasive arguments he refers to concern the finite supply of bitcoin, which limits the number of existing units to 21 million. This means that it is not susceptible to artificial inflation techniques such as quantitative easing.
This makes it an attractive investment prospect in times of geopolitical turmoil, when traditional markets are unstable and governments seek to provide economic relief at the risk of inflation.
“As central banks continue to print more money to alleviate the financial recession, investors are looking for a hedge asset and bitcoin appears to be the answer,” Konstantin Anissimov, executive director of the London-based cryptocurrency exchange CEX.IO. said The independent.
The volatile history of Bitcoin in pictures
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Mr. Anissimov warned that all investors hoping to make a quick profit from the cryptocurrency should be tired of its infamous volatility, which saw it drop to less than a quarter of its value after the 2017 run.
“Bitcoin’s price history suggests taking a precautionary approach,” he said.
“During the last bull run, 30 to 40 percent corrections were the norm. Whenever prices rose to new highs, a sharp correction followed. “
