Crypto industry players who are optimistic about bitcoin point to various reasons why they believe the digital currency will rise, including rising inflation and growing institutional investor participation. But an uncertain regulatory environment continues to prove a headwind for Bitcoin.
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Bitcoin could reach $100,000 within a year, the CEO of crypto lending company Nexo has predicted.
Antoni Trenchev told CNBC he believes the world’s largest cryptocurrency could surpass $100,000 “within 12 months.”
He said he is “concerned” about Bitcoin’s near-term prospects and hinted that Bitcoin could fall in line with traditional financial markets as the Federal Reserve begins to wind down its massive monetary stimulus program.
But that, in turn, could “give another boost to crypto,” he added, as a “crash” in stocks would likely mean the Federal Reserve would eventually “loose back in no time.”
If Trenchev’s forecast is correct, Bitcoin’s price should more than double this year.
For what it’s worth, Trenchev predicted in January 2020 that Bitcoin’s price would surpass $50,000 by the end of this year. “Everyone laughed at me,” he says.
Trenchev’s prediction for 2020 has not come true. Bitcoin only managed to peak just above $29,000 this year. But the cryptocurrency finally surpassed that $50,000 in February 2021.
Crypto believers say the market has matured and that liquidity abounds now that major Wall Street institutions like Jump Trading and Jane Street are flocking to digital assets.
Meanwhile, crypto “whales” like Do Kwon, the co-founder of blockchain firm Terra Labs, are buying up millions of dollars worth of Bitcoin in the belief that it could become a future “reserve” currency.
But there is some headwind for the market. The global regulatory environment remains fragmented and the crypto market remains volatile. In particular, Bitcoin remains highly correlated with the stock market, particularly the Nasdaq index. While stocks remain volatile, so could Bitcoin.
Bitcoin is still down around 40% from its record high of $68,990.90.
Other crypto executives do not expect such a big price increase this year.
“I would say that at this particular moment we are living under global uncertainty in the markets, not only in the crypto markets but also in the stock markets,” Paolo Ardoino, Bitfinex’s chief technology officer, said in an interview with CNBC Wednesday.
“So we’re definitely seeing lower volumes on the crypto side… bitcoin volumes have been declining for the past few weeks. So that’s pretty important as a metric because it says a lot of whales, a lot of active market participants, participants who were previously very active are waiting a bit on the sidelines.”
Whales are big investors who can move the market.
Ardoino said Bitcoin could fall sharply below $40,000, but he expects the digital currency to be “well above” $50,000 by the end of the year.
“I’m a bullish person on bitcoin… I see so much in this industry and in so many countries interested in adopting bitcoin that I’m really positive,” he said.
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