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Bitcoin, after a prolonged period of stability, suddenly jumped higher, breaking above the $ 10,000 per bitcoin level seen for the first time since June and climbing towards $ 12,000.
The price of bitcoin has risen about 20% over the past seven days, hitting highs of $ 11,420 on the Luxembourg-based Bitstamp exchange, amid stock market nervousness and a rally in the price of gold, considered a safe haven.
However, some market watchers have warned that bitcoin’s recent price gains may not last, with the options market reporting only a 7% chance that bitcoin will return to its all-time high of around $ 20,000 before the end of 2020. .
The price of bitcoin has risen higher, following the price of gold.
SOPA / LightRocket images via Getty Images
“Our 2020 balance forecast is still high, with a year-end of around $ 7,000 [per bitcoin] with a push to new highs in 2021, “Gavin Smith, chief executive of bitcoin and cryptocurrency consortium Panxora, said via email following the release of Finder’s latest cryptocurrency forecast report, adding that he expects” a short-term failure this year before the real rally takes hold.
“Our view is that we still believe markets are being dragged to one side by the story of inflation hedging pushing bitcoin higher, while at the same time the global economy is experiencing a massive demand shock with the potential to push. bitcoin is down “.
In March, the price of bitcoin fell sharply, in line with global equities and other commodities, as the coronavirus pandemic spread around the world and countries went into lockdown to contain it.
Bitcoin price quickly rebounded, driven by a much anticipated supply squeeze and bullish signals including investment giant Paul Tudor Jones revealing he was buying bitcoin as a potential hedge against inflation unprecedented central bank stimulus measures designed to support coronavirus-affected economies could lead.
Smith’s warning resonates with comments made by Binance CEO Changpeng Zhao (CZ) last week, who said bitcoin is still tied to the stock market and a future slump could lower the price of bitcoin.
“People shouldn’t take the description of bitcoin as a safe haven literally,” CZ told Bloomberg.
The price of bitcoin has suddenly risen in the past couple of days after trading sideways from the start … [+]
Coinbase
Others have also warned that the price of bitcoin could drop in the near term.
“There won’t be that much bitcoin money as people try to survive,” said Jimmy Song, author of Programming Bitcoin, in Finder’s Cryptocurrency Predictions 2020 report.
“Until prices rise in the grocery store, bitcoin is not really going to start taking off. I suspect it will take another nine months or so.”
Finder’s report, released last week before the bitcoin surge to $ 12,000, revealed that half of the 28 bitcoin and crypto experts surveyed thought it was the right time to buy bitcoin, with 32% advising investors to holding it back and 18% saying it was time to sell.
Another panel member, University of New South Wales Associate Finance Professor Elvira Sojli, said she expects the bitcoin price to be below $ 10,000 by December 31, 2020. The panel’s consensus was that the bitcoin’s price soared to just under $ 13,000 by the end of the year.
“If anything, the second or third wave of Covid-19 could lead [the bitcoin price] “Sojli said, pointing to the devastating economic impact of the coronavirus.
Meanwhile, as bitcoin began its rally over $ 11,000, the bitcoin options market was only signaling a 7% chance that the price would return to its all-time high of $ 20,000 per bitcoin, analyst firm data revealed. crypto derivatives Skew, with the market putting the odds of $ 10,000 per bitcoin by Christmas at around 50%.
“The options market is rapidly re-evaluating the likelihood of [new highs] by the end of the year, from 4% to 7% in the last week, “Skew CEO Emmanuel Goh told crypto and bitcoin news site Coindesk.
Bitcoin options data suggests that there is less than a 10% chance that the price of bitcoin will return to its own … [+]
Crooked
Elsewhere, others are confident that the price of bitcoin will continue to rise.
“Since March, there have been significant changes in how institutional investors view bitcoin,” Joe DiPasquale, chief executive of BitBull Capital, said in an email.
“Now that institutions have switched to bitcoin in 2020, the price has shown more support over the past couple of months. We won’t see a repeat of the March crash, but bitcoin will still remain a little more volatile than stocks.”
“I think the price needs to take a breather – it has moved quite a bit in a short period of time,” Bill Herrmann, managing partner of investment management firm Wilshire Phoenix, said via email, adding that he could see The price of bitcoin reached its all-time highs by the end of the year “if we continue to receive regulatory clarity and continued institutional adoption,” indicating last week’s decision by the US office of the currency controller to allow the country’s banks of custody of digital assets as the trigger for the latest rally.
“It’s huge for space and should serve as a favorable wind for quite some time.”
Trying to predict bitcoin price movements has proved difficult, however, and some have warned against trying to predict market movements.
“Predicting the price of bitcoin on an exact timing is a stupid task,” Peter Wall, CEO of UK-listed cryptocurrency miner Argo Blockchain, said via email, adding that he is “very optimistic in the medium to long term. as we believe that bitcoin will again be one of the best performing asset classes in the coming months and years. “
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