Have you ever heard about Peter Brandt? He’s a cryptocurrency trader. Not just any trader. He’s a veteran, and his achievements have earned him a status that is nothing short of legendary. He recently talked to Yahoo Finance YFi PM, and he made an interesting prediction: Bitcoin could reach $50,000 sometime in the next two years.
Is this just wild optimism? Is Mr. Brandt deluded? Is he crazy or using a crystal ball? We don’t think so. First of all, this forecast is quite conservative when you compare it with others such as John McAffee’s who’s stated repeatedly that the price will get to $1.000.000,00 within the same time window.
$50.000,00 is not that much compared to that. Secondly, Mr. Brand is an analyst whose opinions are not dominated by wishful thinking at all. He’s recognized for giving the market a heads up about the imminent drop in Bitcoin’s price back in 2018, and he nailed it as the mother of all cryptocurrencies lost more than 85% of its value during that year.
Mr. Brandt explained that he used technical market analysis and market history to asses Bitcoin’s situation for last year: In his recent appearance on Yahoo Finance YFi PM, the veteran crypto trader said,
“I believe that charts reflect underlying supply and demand fundamentals and that’s how we have to look at it.”
He recapitulated how the BTC price advanced parabolically after the 2015 debacle which was more or less as bad as last year’s catastrophe. And he expects the scenario to repeat itself and the crypto market to go into a parabolic bull period once again.
Analysts don’t buy it.
Several analysts were not very eager to jump in Mr. Brandt’s wagon. While they acknowledge the possibility of the prediction materializing, they were emphatic in stating that price prediction is a very tricky thing, especially when it comes to more extended periods than a few minutes or hours (and even in short periods of the kind you use for daily trading is quite a complicated matter).
“Peter Brandt’s assessment is purely based on technical indicators and market history,” said the CEO of BitBull Capital, a hedge fund, Joe DiPasquale. He continued by explaining that “While technical analysis has a place in all markets, past performance is no guarantee for future results.” He also talked about the market in the last week and a half “Meanwhile, however, the current rally is consolidating nicely and we can expect further price appreciation if the trend continues.”
The managing director of crypto-to-crypto derivatives platform, Maruan Garcon also expressed weariness “We have to be careful when trying to predict markets, parabolic movements happen once in a blue moon” he said. So “we can’t depend on them as they tell us more about the crowd’s sentiment than the actual value of the asset.”
While Mr. Garcon accepted that market history could help to understand the market and its future developments, he also said that “going forward we have to be more careful because the market has matured and the participants have changed.” In other words, he implied that it is not the same market it was four years ago, so history may not apply anymore.
Adoption could make all the difference.
Many analysts stress the relevance of mass adoption for Bitcoin. They think that if the asset expands its user-base significantly, that alone could bring the price all the way up to $50.000,00 if Bitcoin adoption continues to grow exponentially over the next couple of years. But if adoption stagnates, no growth will be possible. Even holding to the current level of $5.000,00 will become impossible.
Paxos cofounder and CEO thinks along the same lines, more or less.
“The next wave of growth in this cycle will be driven by adoption from mainstream retail and institutions, markets that are order of magnitudes larger than the current users. In that context, $50k seems possible.”
The relevance of adoption is impossible to deny, of course. But adoption is undergoing as the Bitcoin network is already handling amounts of money that compare to those managed by Mastercard’s or Visa’s networks, so there’s really no doubt that use cases for Bitcoin will continue to multiply thus bringing more users to the crypto verse’s foremost and oldest cryptocurrency.
Another option for market growth.
There is a factor that the analysts are not taking into account.
A lot of speculation has been going around among observers, analysts and just regular cryptonauts over the last sixteen months (which is the period we’ve been living under the cryptocurrency winter). Chief among all speculative ideas is the answer to the question of what will prompt the next crypto spring (even summer) to occur if only because we all wanted for the bear’s hug to finish as soon as possible.
There have been several answers that go from the reasonable to the utterly impossible, but one among those has been especially frequent and, besides, it kind of makes a lot of sense, and that is institutional investments.
Let’s not forget that the cryptocurrency market has been populated mainly by retail investors so far. It’s not been like Forex, the commodities market, the stock exchange or any of the traditional financial markets in which banks are the primary movers and shakers, and individual investors that don’t work for financial institutions are still professionals for whom it’s a permanent job.
The cryptocurrency market has never been like that. At least not so far. In crypto, most investors are basically geeks who have become interested in the market because of the promise that blockchain technology holds for the world. Let’s face it. Crypto is more counter-cultural and underground currently than Pink Floyd was in 1967. Especially since it still gets a bad rap as a criminal-friendly market.
So what would happen if Wall Street, London’s City, and some of the most influential traditional banking and financial institutions become involved with digital assets? So far they’ve regarded Bitcoin (as well as all other cryptocurrencies) with fear and suspicion, so they’ve stayed away for the most part.
But that is changing.
Think about Bakkt. It’s going to be a payments system and exchange platform that’s going to be created by a partnership between Starbuck’s, Microsoft, and (here’s the kicker) ICE. ICE may be the least famous name in the list, but it’s probably more important. It’s the company that owns and operates the New York stock exchange, and as institutional money goes, it’s tough to beat ICE in relevance in influence. There are many other examples. The point is that the banking community attitude towards digital assets is changing slowly and many members are starting to get their feet wet in the crypto river.
And why is that important? Because we’re talking about financial firms that have insane amounts of money laying around. And, should they chose to bring even a tiny fraction of that capital into the cryptocurrency market, prices could soar overnight. The relevant question regarding Mr. Brandt’s estimate would be if that money will hit the market sometime before the next 24 months. There’s no way of knowing that as things stand.
So what to make of the $50,000 in two years prediction? Well, the tricky thing is timing. Getting the dates right for the future is incredibly difficult. Even psychics don’t commit to dates. But other than that, we do not doubt that the Bitcoin price will get there and then it will go beyond. When? We have no idea. But it will happen sooner or later.
Image courtesy of Pixabay.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.