Sunday , November 29 2020

Bitcoin revival releases animal spirit and $ 300,000 forecast



History is not repeated, but it rhymes, says Fundstrat Global Advisors strategist David Grider.

History is not repeated, but it rhymes, says Fundstrat Global Advisors strategist David Grider.

  • The world’s largest digital currency is in the middle of a bubbling rally that this week saw it over $ 18,800 in almost three years.
  • Crypto fans cite many reasons why it may continue its run this time.
  • Famous billionaire investor Mike Novogratz says he sees “tons of new buyers” among “some supply”.

Bitcoin mania is back and with it, soaring predictions return from celebrity crypto fund managers to Wall Street stalts about where it can go next.

The world’s largest digital currency is in the middle of a bubbling rally as this week saw it over $ 18,800 for the first time in almost three years. Strategists and crypto fans are now jumping to project their next unprecedented heights. Outside of the perpetual “moon” statements from Twitter experts, forecasts range from $ 25,000 to more than $ 300,000 by the end of next year.

Here’s what helped Bitcoin’s run: a warmer embrace from the likes of Fidelity Investments and JPMorgan Chase & Co. is often cited as a catalyst, as is a decision by PayPal Holdings Inc. to give its customers access to cryptocurrencies. Then there is always FOMO, or fear of missing out, because prices fall higher. For crypto-evangelists, this development is only the first intersections on the road to the ubiquitous.

“You suddenly have this near-perfect background that not only lends validity to the asset class but also really shows its resilience,” said Michael Sonnenshein, CEO of Grayscale Investments, which operates the largest exchange-traded crypto trust. It is “again to show investors no matter how many times it is challenged, that it has a way of coming forward almost stronger or showing its ability to be really, really resilient”.

In the midst of Bitcoin’s euphoric run this week, Fundstrat Global Advisors strategist David Grider raised its price target at the end of 2021 to $ 25,000 from $ 16,500, or about another 40% higher than Friday’s closing price.

Grider relies on an internal model that looks at valuations and takes into account prices for cryptocurrencies. Back in 2017, when Bitcoin rose to close to $ 20,000 – its record high – his framework showed that the coin was in an “incredible bubble”. He says he got that call right and is convinced that his model also works this time.

“History is not repeated, but it rhymes,” says Grider, the company’s head of digital access strategy. “The audience is bigger, the market is bigger, it’s a little more institutionalized – you have different capital fields coming in.”

To be sure, Grider’s forecast sounds familiar to crypto veterans. Fundstrat founder Tom Lee had started 2018 with a price target at the end of the year of $ 25,000, before eventually abandoning time frames for his predictions in December when it was between $ 3,000 and $ 4,000.

Cryptophans still cite many reasons why it can continue its course this time. Famous billionaire investor Mike Novogratz says he sees “tons of new buyers” among “some supply”.

Novogratz, the founder of Galaxy Digital, has not been shy about his view of Bitcoin and this week said he sees it reach $ 65,000. His comments came via Twitter in response to a question from “Game of Thrones” star Maisie Williams, who asked her 2.7 million followers if she would invest in the coin. (She did.)

Bitcoin would need to more than triple to reach Novogratz’s goal. In November 2017, the former hedge fund manager had forecast that the coin would reach $ 40,000 by the end of the following year, only to see it end below $ 4,000.

The most bullish head forecasts are those that see Bitcoin reach $ 100,000 or higher. Tom Fitzpatrick, a strategist at Citigroup Inc., made a splash this month when he said the crypt could potentially reach as high as $ 318,000.


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