It seemed that Bitcoin (BTC), after scaling up to an absolute high of $53,000 just two weeks ago, was on the verge of reclaiming its previous all-time highs. The last week saw the world’s largest cryptocurrency in terms of total market capitalization drop nearly 13%. A single BTC is currently trading at $45,800.
However, Standard Chartered’s cryptocurrency research team seems unaffected by the volatility. Analysts refer to Bitcoin’s recent plunge as a “false dive” and reiterate that a goal of $100,000 per BTC for the year is possible for the flagship cryptocurrency.
According to the banking giant, Bitcoin will reach $100,000 “late 2021” or “early 2022”, which will coincide with a massive increase in Ether’s (ETH) value. The research team found that Ether has a “structurally” value of between $26,000 to $35,000 for a year. However, BTC must grow to $175,000.
Factors that contribute
Cointelegraph spoke to Ben Caselin (head of research and strategy, cryptocurrency exchange AAX) in order to get a better understanding of whether a year end projection of $100,000 per BTC was still possible. According to Caselin, Tuesday’s sale was a classic “sell-the-news” move. He also believes that there may have been an elaborate “bear trap”. Cointelegraph was told by Caselin:
“I expect $100K to still be in play for Bitcoin this fiscal year. If anything, $100K would seem a bit overwhelming. If we look at PlanB’s stock to-flow, we can see that we are still moving in a lower band. We are still tracing the ‘worst case-scenario’ prices which were $47K last month and $43K in September. And no less than $135K by the year’s end.
He said that Bitcoin is more valuable when you look at the on-chain data than just price technicals. This allows users to get a better view of what’s happening across the network in real time.
Tommy Schreiner, senior analyst at crypto data provider TheTIE said that Bitcoin could still reach $100,000 by 2021.
Although $100K may seem absurd, $50K was a reasonable amount last year. There are other factors that could affect that scenario. This pullback was mostly a result of de-levering the market. A large portion of leveraged open interests got wiped out, effectively resetting all bullish traders who were going YOLO.
Schreiner also stated that, despite the global economic turmoil, the United States Federal Reserve has not shown any signs of stopping its money printing, which he considers a positive sign for potentially more risky assets like cryptocurrencies.
He also highlighted the fact that layer-one solutions like Terra, Avalanche and Polygon have continued to bring new money into global digital asset ecosystems in recent months. This may help boost BTC’s value.
NFTs [nonfungible tokens] are burning a large amount of Ethereum every single day, despite pricing out many retail users. Schreiner stated that $100K may seem absurd. However, it is worth considering how far crypto has come in just one year.
Nick Spanos, cofounder of Zap Protocol believes that El Salvador’s acceptance of Bitcoin has put the digital currency on the path to reaching the $100,000 mark by year end. He said that Ether also hopes to reach $10,000 by then.
There are some doubts about $100,000
Lennix Lei, OKEx’s financial markets director, believes that Bitcoin’s future is bright, but that does not necessarily mean that the world’s most popular digital currency will end the year at $100,000. Cointelegraph was informed by him:
“I believe we would see a quick-term correction given the looming tapering from U.S. Bitcoin remains very sensitive to global money supply. The cryptocurrency is a legitimate alternative asset type and people are looking for specific asset allocations.
Lai admitted that even if only 1% of the world’s wealth were to be poured into Bitcoin in the near-to–mid future, then a target price of $100,000 per BTC would be possible.
Igneus Terrenus (head of communications at cryptocurrency exchange Bybit) believes that the best argument for Bitcoin reaching $100,000 this year is the approval of an ETF in the United States. This will, in his view, open up the BTC marketplace to new players such as wealth management products and retirement funds.
“SEC punted [BTC ETF]’s decision from Sept. 8, down to Nov. 14, still within the calendar year 2021. According to anecdotal evidence, almost all wealth managers ask their clients about Bitcoin exposure. He told Cointelegraph that an ETF could be the best vehicle to make this happen.
The technical aspects of Bitcoin are strong
Despite recent volatility, Bitcoin’s fundamentals appear to be very strong at the moment. Charles Edwards, the creator of Hash Ribbons, one of the most popular Bitcoin metrics, claimed recently that Bitcoin’s fundamentals are strong. As long as it can hover above the $42,000 resistance zone, the iconic cryptocurrency will remain in the green.
Edwards predicted late last year that Bitcoin would have a target price of $100,000 to $200,000. Edwards predicted that Bitcoin could reach a price target of $100,000 to $200,000. This prediction was made after Bitcoin reached its record high of $63,000 earlier in the year.
Edward believes that the difference between the current rally and previous rallies is the low level of retail interest. He believes that Bitcoin will need to spend more than $50,000 to achieve a new all time high. He said that he believed this would attract more retail interest.
Edwards believes that the market is gradually but surely getting closer to the $100,000 price point, even though it may not be possible for him to get $100,000. He believes that in order to see that happen in the next three to four months, either renewed retail interest or significant purchases from top S&P 500 companies such as Tesla are required.
Comparing with other events, the monetary consequences of the 2020 halving were quite manageable up to now. Bitcoin has only seen a 4x increase. We can also see that BTC’s value increased by 55x and 15x respectively in the years after the 2016 and 2012 halvings. This suggests that it is still possible to move up to $100,000.
It will be fascinating to see how the next few days unfold for the cryptocurrency market as a whole, especially since regulators around the globe continue to tighten their grips upon this still-nascent sector.