Here Is Why Bitcoin Could Dual, Or Triple By The End Of This Year – coin, Seeking Alpha

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Here Is Why Bitcoin Could Double, Or Triple By The End Of This Year - coin, Seeking Alpha

Here Is Why Bitcoin Could Dual, Or Triple By The End Of This Year

Feb. 26, 2018 9:13 AM • coin

Bitcoin has bot on a wild roller-coaster rail overheen the past few months.

After pulling down by 75% from latest highs, Bitcoin almost doubled, is now trading sideways, and has many market participants asking what’s next.

Proposed regulation ter South Korea looks to make Bitcoin a legal asset te the country, one of Bitcoin’s largest and most controversial markets.

Approval of Bitcoin ETFs ter the U.S. te the 2nd half of this year could enable Bitcoin to transition into a trillion dollar asset.

Favorable regulation, substantial improvements te functional properties, enhanced institutional rente, and significantly higher investor and consumer confidence should propel Bitcoin’s price much higher into year’s end.

Bitcoin: Likely To Dual, Possibly Triple Relatively Soon

Bitcoin (COIN) has bot on a wild roller-coaster rail overheen the past year. The price skyrocketed by almost Two,000% via 2018 from under $1,000 to almost $20,000. Then, when it became overduidelijk that Bitcoin mania wasgoed an unsustainable phenomenon, the price dropped sharply, and Bitcoin deflated all the way down below $6K. From then, Bitcoin’s price recovered by almost 100%, but fell brief of violating through major resistance at $12K, and at the time of writing this article, Bitcoin is relatively sustained, trading at around $9,500.

Ter the absence of any significant favorable developments, it is possible for Bitcoin to trade around thesis levels, perhaps even retest the latest lows of $5-$6K. However, there are several promising developments destined to occur zometeen this year that are likely to greatly improve investor and consumer confidence ter Bitcoin. This phenomenon ter turn should significantly ramp up request for Bitcoin towards the 2nd half of the year and propel its price considerably higher. Ultimately, I expect the price of Bitcoin to at least dual, possibly triple, or more before the year completes. Here’s why.

A More Favorable Regulatory Outlook

The very first factor likely to materialize is the introduction of more favorable regulation te the U.S., Japan, South Korea, spil well spil ter other key Bitcoin markets. Regulation is often looked at spil a negative force. However, there are various types of regulation, and some forms can be enormously constructive for Bitcoin’s ecosystem. There emerge to be several regulatory developments coming down the line that are likely to be utterly favorable for consumers, investors, and the overall digital asset complicated.

There is still significant risk and uncertainty concerning unregulated exchanges and other key areas of the cryptocurrency ingewikkeld. Exchanges are continuously bombarded by security breaches te which market participants usually end up being victimized, spil cyber criminals often escape with someone else’s Bitcoins. Te a more regulated environment, thesis threats would be much better guarded against, and market participants could have their accounts insured, much like they would their bankgebouw or brokerage account.

Japan, the U.S., and South Korea are presently the three fattest markets for Bitcoin and are spearheading the effort to create a safe, and level playing field for digital asset trading. The U.S. has introduced Bitcoin futures, permits market participants to invest ter the Grayscale Bitcoin Investment Trust (OTCQX:GBTC), and is likely to permit for the introduction of Bitcoin based ETFs going forward. Introducing Bitcoin ETFs will propel Bitcoin to the next level, and many experts agree that this could be the step that converts Bitcoin into a multi-trillion-dollar asset. Bitcoin ETFs could become a reality before the midpoint of this year.

South Korea is also making significant strides ter making Bitcoin a much more welcome part of its overall economy. It is looking exceedingly likely that South Korea may take an treatment similar to Japan. Legislation scheduled to be ready te March aims to classify Bitcoin and several other altcoins spil “liquid assets”, which will officially legalize them spil a form of asset within the country. This legislation is very likely to provide extra request for Bitcoin and other digital assets, which should te turn translate to significantly higher prices going forward.

Extra regulation of exchanges and other infrastructural elements would further protect consumers and investors from unforeseen losses. Ultimately, significantly safer exchanges should inspire confidence, and help propel Bitcoin deeper into the main stream. Enlargened consumer and investor confidence should also considerably improve the current enormously low participation rate of harshly 0.5%, this should also help prices climb higher te the intermediate to long term.

Solving Scalability and Cost Issues

Significant breakthroughs ter scalability, cost, and transaction speed for Bitcoin are already here. Also, Laszlo Hanyecz is back, the man who made the now infamous very first everzwijn Bitcoin transaction. Ter 2010, Laszlo purchased two large pizzas for Ten,000 Bitcoin, which would be worth about $95 million today. However, this time Laszlo only waterput up 649,000 satoshis, which is equal to about $62 to purchase the two large pizzas ter London. But there is something else that is unique about his transaction. Laszlo used his friend to sub contract out the pizza delivery, and paid for them using the Lightning Network.

The transaction demonstrates that it could have bot done directly with the pizza place just spil lightly if the pizza restaurant had its own lightning knot. Laszlo’s is still amongst the some of the very first transactions being done overheen the Lightning Network, spil the very first confirmed transaction wasgoed reportedly carried out on January 20th of this year, just overheen one month ago. But with successful transactions already being implemented overheen the Lightning Network, it is likely only a matter of time until it starts to be widely adopted on an exponential scale. What is the Lightning Network?

The Lightning Network is a protocol that creates an off-chain system by forming a network of payment channels that can be accessed by involved parties independent of the broader blockchain network. This is essentially an add-on payment channel system to Bitcoin’s blockchain that solves scalability and cost issues by taking transactions off the main network and onto a more private network amongst the users of the underlying payment channel.

The Lightning Network can process thousands of transactions vanaf 2nd compared to the current limit of fewer than Ten. Moreover, transactions are conducted essentially for free, which makes the upgraded Bitcoin payment system cheaper than the current mass payment processing system, and capable of conducing millions of transactions vanaf day much like Visa (V) and Mastercard (Moeder). The Lightning Network is already being implemented, and is likely to become widely adopted going forward.

Mass adoption and mainstream implementation of the Lightning Network may still be several years away, but it is becoming overduidelijk that this network is functioning spil designed, and is solving Bitcoin’s widely criticized faults involving scale, speed, and cost. Further improvements, and broader adoption of this network should reassure market participants of Bitcoin’s functionality capabilities, which should attract more investors and consumers to Bitcoin going forward.

Institutional Holdings Likely to Increase

Institutional holdings te Bitcoin are miniscule ter relation to other assets. This is because unlike most assets Bitcoin wasgoed not engineered on Wall Street, or te some other very centralized financial center. Bitcoin is unique, and most institutions that just began playing around with it embarked doing so relatively recently when futures trading wasgoed introduced. Moreover, most institutional players have bot shorting Bitcoin. Thus, very few are on the long side of the Bitcoin trade, for now.

However, spil Bitcoin’s regulatory, and functionality issues start to get resolved, the next gam higher is likely to practice a significant influx of institutional money. The regulatory landscape concerning Bitcoin should look much cleaner going forward and the Lightning Network will greatly improve Bitcoin’s functionality properties, elements that should drive institutional rente.

Also, an breathtaking amount of Bitcoin is situated ter very few arms. A latest report displayed that harshly 40% of all Bitcoins were held amongst just 1,000 “whale” holders. This indicates that an terrific number of Bitcoins are held by very few market participants who are mostly early adopters and not institutions. Once Bitcoin becomes more mainstream and lighter to hold by institutional investors through further regulation and the introduction of Bitcoin ETFs, possibly ter the 2nd half of this year, tremendous amount of capital is likely to flood the Bitcoin market. Naturally, this flood of fresh capital should enable Bitcoin’s price to increase dramatically.

Technical Snapshot

The logarithmic chart demonstrates that despite the acute declines from latest highs Bitcoin remains ter an uptrend, and is likely to resume its upward trajectory following the current correction process. It also seems unlikely that Bitcoin is injecting a prolonged bear market phase.

A longer-term chart indicates that Bitcoin has a pattern of selling off significantly after obtaining dramatic fresh highs. From peak to trough Bitcoin talent up harshly 75% of its value te the latest sell-off. This is consistent with prior corrections, after which positive momentum wasgoed regained and further highs achieved. Therefore, once the correction concludes, Bitcoin is likely to regain its upward trajectory, and the momentum of the next gam higher should propel Bitcoin to approximately the $50,000 region.

The price chart indicates that Bitcoin fell towards the significant support region of $5-6K ter latest weeks, had a strong bounce back but has not yet punched through major resistance at $12K. This is now the level Bitcoin needs to overcome to reestablish its upward momentum.

A Look at GBTC

GBTC is a trading voertuig designed to track the price of Bitcoin. The fund wields Bitcoins and each share te the fund represents toughly 0.001 of one Bitcoin. GBTC is the very first such muziekinstrument te the U.S., and permits the trading of Bitcoin through the effortless use of an ETN. The only other ways to directly bet on the prices of Bitcoin remain rechtstreeks purchases of the cryptocurrency and futures trading. GBTC permits market participants to bet on the prices of Bitcoin by wielding shares te the fund, which is much like possessing a stock or an ETF. However, market participants pay a steep premium for possessing shares ter the fund. Spil of market close on Friday, GBTC wasgoed trading at about a 70% premium to Bitcoin. GBTC’s premium fluctuates due to supply and request compels. Since GBTC is the only such muziekinstrument of its kleintje te the U.S. it likes enormous request. However, once Bitcoin ETFs start coming online, possibly te the 2nd half of this year, the premium is likely to get sucked out of GBTC.

GBTC’s chart emerges rather neutral, is neither oversold strafgevangenis overbought right now, shows very first support at $16, and further support at $14, and suggests a breakout area at around $20. The price act will largely go after Bitcoin’s fluctuations, but the premium could increase or decrease due to the fear and greed dynamic. Higher fear levels ter the market should result ter a lower premium, and higher levels of greed should result te premium expansion.

The Bottom Line

Improved sentiment should drive Bitcoin’s price considerably higher te the 2nd half of this year. Bitcoin’s price is all about sentiment, and significantly improved functionality, coupled with a much more favorable regulatory environment should greatly improve investor and consumer request. Furthermore, improved investor sentiment should enable meaningful amounts of capital to inject the Bitcoin market ter the 2nd half of the year. This is likely to coincide with a broader adoption of the Lightning Network, possible introduction of Bitcoin ETFs, and regulatory breakthroughs ter South Korea spil well spil ter other key regions. The underlying dynamic is likely to attract a vast wave of capital that should enable Bitcoin’s price to at least dual, possibly triple or more by the end of the year.

It is significant to point out that a doubling of Bitcoin’s current valuation will bring its market cap to only about $325 billion, and a tripling it will produce a market cap of about $487 billion. To waterput this ter setting, $487 billion represents merely 14% of the world’s $Three.Five trillion investable gold market, and accounts for a miniscule 0.5% of the world’s $94 trillion fiat money and gold store of value, and medium of exchange markets. Spil Bitcoin sets up to rival for market share within thesis two massive segments, a valuation below $500 billion still seems relatively insignificant ter the greater scheme of things.

My year-end price target range for Bitcoin is $30,000-45,000

Warning: Despite my bullish view on Bitcoin, it remains a speculative and very volatile asset. Certain elements and developments could cause the price to decline further te the brief term. Bitcoin represents a relatively petite part of my portfolio and typically accounts for toughly 3-5% of total holdings.

Disclaimer: This article voices solely my opinions, is produced for informational purposes only, and is not a recommendation to buy or sell any securities. Investing comes with risk to loss of principal. Please always conduct your own research and consider your investment decisions very cautiously.

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