Bitcoin’s recent run higher has brought out a lot of old predictions — and some new ones — about the future of crypto prices. The largest cryptocurrency has had quite a 2020, where after dipping below $4,000 it’s marched higher and is now bouncing around in the $11,000 range.
It’s seen further acceptance in the mainstream investment community, experienced a “halving” where the rate of Bitcoin created dropped by 50% as of May, and seen correlations with gold rise to records.
The environment has changed significantly since Bitcoin’s big 2017 runup — and the comedown and “crypto winter” that followed. The digital-asset community tends toward Bitcoin bullishness at pretty much any time, but there are indications the increase might be more sustainable this time around with advocates pointing out the advantages of an alternative form of money while governments ramp up stimulus in the wake of the coronavirus pandemic.
First of all, there’s the rising demand from some of the biggest market players.
“We are continuing to see increased interest from institutional investors,” said Henri Arslanian, PwC Global Crypto Leader in Hong Kong. “Institutional investors now are able to get access to digital assets via multiple players that are regulated, of institutional grade and that would pass any operational due diligence test of any institutional investor. This was not the case 18 months ago.”
Then there’s the halving. JPMorgan Chase & Co. says Bitcoin’s intrinsic value — which it calculates using a cost-of-production approach — has jumped because of it. While the market price was above the JPMorgan intrinsic value estimate through much of 2019 and early 2020, the two measures had been fairly close together until a recent upward move by Bitcoin.