A senior analysts is of the opinion that bitcoin could be trading above gold by the end of the year and the price of bitcoin could hit s much as $3,and this digital coin could hit a fresh record high.
According to data compiled by CoinDesk, such a phenomenal rise and on this scale would represent a more than 130 percent increase from the fresh $1293.47 high it set last week, and a near 150 percent increase from bitcoin’s current price of $1,204 at the time of publication of this report.
The recent rise in the price of bitcoin which is up 195 percent in the past 12 months, has been attributed to a number of geopolitical and broader market factors even though at present the price of bitcoin at time of publication is not trading above an ounce of gold.
The geopolitical factors that have influenced the rise of the price of bitcoin include among other attempts to clamp down on money laundering and therefore increased regulation from Chinese authorities, viewing of an alternative store of value in India for bitcoin cue to the ruckus caused in the Indian economy by demonetization and the uncertainty in the global economy and the volatility in other currencies.
In the near future bitcoin can go even higher, predicts Adam Davies, a consultant at Altus Consulting, who works with large financial institutions on technology.
“In terms of price this year, I think it will go up to $3,000. As it becomes more pervasive and more generally accepted, I think you’ll see rapid growth in adoption,” Davies told a news channel in an interview.
“People are unsure about what is going on in the world, and digital currencies unlike the U.K. pound sterling have been hit badly because of Brexit, so people are looking to divest into bitcoin. There is a definitely upward trend. So the drivers will be hedging against currency fluctuations and insecurity in the markets.”
His company is seeing “unprecedented volume and sign ups”, adding that at the current price appreciation, a £3,000 dollar price by the end of the year is “feasible, said Peter Smith, CEO of Blockchain, a bitcoin wallet.
There can be a number of factors that could be responsible for the boosting of the price of bitcoin this year which include the assumption that the bitcoin-based exchange traded fund created by Tyler and Cameron Winklevoss, could get approval. And according to Thomas Glucksmann, head of marketing at cryptocurrency trading platform Gatecoin, this approval could lead to a “flood of institutional funds” entering the market.
Other potential factors include the addition of further credibility to the cryptocurrency, which was once seen as just a means to buy illegal drugs, as Japan has recently passed a bill that deems digital currencies as similar to fiat money and can be used as methods of payments.
Predicting the price somewhere in the region of $2,000 to $2,500 is a safer prediction even though $3,000 by the end of the year seems “realistic”, Glucksmann said.
“The bitcoin price will continue to rise this year although it’s difficult to say by exactly how much,” Glucksmann said.
(Adapted from CNBC)