Are you shocked? Surprised? You shouldn’t be. Bitcoin above $10K was always an expectation by anyone who understands what’s happening in crypto markets right now as well as the true global appeal of BTC. We had to endure a lot of noise about how bitcoin is worthless in the meantime.
Here’s what’s happened since then: institutional money has moved into bitcoin in a big way and the market is reacting. As CME Group tweeted just a couple of weeks ago, “CME Bitcoin futures (BTC) shows growing signs of institutional interest”. Meanwhile, other crypto watchers are predicting big price moves in the future. Take ThinkMarkets FX Chief Market Analyst Naeem Aslam who says “the least path of resistance for bitcoin price is skewed to the upside” and sees a price range of $60K to $100K. Morgan Creek Digital’s Anthony Pompliano, meanwhile, sees BTC hitting $100K by the end of 2021.
This is heady stuff – major price predictions, growing institutional interest, and relatively low public participation that could go through the roof if FOMO kicks in.
But let’s step back and take stock of how we got here – to what we consider a Healthy bull market. Beginning at $3K, the market was exhausted. From there, we’ve seen steady consolidation and the all-time high of $20K will likely be tested in the near future. This is a rally built on smart money moving into bitcoin. It’s also built on Facebook.
As an early crypto adopter and believer in blockchain technology, I’ve watched these markets for a long time. I cannot overstate the importance – as a move to broad crypto acceptance – of Facebook’s new cryptocurrency, Libra. Its announcement sent shockwaves through the financial world and bolstered the price of bitcoin. Here’s why: it’s the most public, broadest-reaching effort by a tech giant (and mainstream company) to adopt cryptocurrency. Facebook’s 2.4 billion monthly users will be able to move money globally with minimal fees and red tape.
But won’t that interfere with bitcoin adoption as well as other potential cryptocurrencies? Absolutely not. Libra, in my view, will be a gateway to widespread global cryptocurrency adoption. Here’s what I wrote in my January column about the outlook for 2019: “Despite what the skeptics say, crypto has a real future and we’re seeing the signs of it as institutions make bets on its legitimacy and regulators weigh in on how to make for a safer and more transparent marketplace.” Sounds awfully prescient now, doesn’t it?
All of this leads to the key question that everyone is asking with BTC above $10K: now what? In the near term, we could see bitcoin back at $6K or up to $15K. Don’t forget as well that we’re less than a year away from another halving of the currency, which will pay out 50% less of a reward to bitcoin miners for solving a new block in the blockchain. The creator of bitcoin, Satoshi Nakamoto, built this feature into BTC to keep inflation in check. We won’t know whether this will create upside pressure on the price of bitcoin but it’s likely to cause some volatility.
And while volatility is something any crypto investor should be used to, I remain convinced that the long-term outlook for bitcoin is bullish. Each step toward broad acceptance (like Facebook) is progress. It might be a wild ride in the meantime, but keep believing in the future that bitcoin offers and you’ll be rewarded for it.
(Rodrigo Marques is the founder and CEO of Atlas Quantum)