Why Billionaire investor Chamath Palihapitiya says bitcoin will surge to $200,000

Billionaire investor Chamath Palihapitiya told CNBC on Thursday bitcoin could soar to $200,000. The Social Capital CEO said he doesn’t know exactly when bitcoin will reach this price, but “it’s going there,” and could happen in five or ten years.

His comments come as bitcoin roars past new records. Bitcoin hit a new all-time high of more than $41,000 on Friday morning. The cryptocurrency’s price has gained over $10,000 in the last week.

Palihapitiya explained that bitcoin is surging because more investors are realizing that national leaders are untrustworthy, and they need to add a hedge to their portfolios. His interview was just a day after a violent mob of Trump supporters breached the Capitol.

“Every time you see all of this stuff happening it just reminds you that wow, our leaders are not as trustworthy and reliable as they used to be,” Palihapitiya said. “And so just in case,  we really do need to have some kind of insurance we can keep under our pillow that gives us some access to an uncorrelated hedge.”

He said bitcoin will “eventually transition to something much more important,” but for now, it will remain as a portfolio hedge.

“The fabric of society is frayed and until we figure out how to make it better it’s time to just have a little schmuck insurance on the side,” said Palihapitiya.

Palihapitiya has…

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What is behind the recent surge in the price of bitcoin?

The latest iteration of a sustained surge in bitcoin price has seen the cryptocurrency rise by more than 300 percent during the past year. This is the third major cycle of price spikes involving bitcoin since 2013 — the previous two “bubbles” ended with a sharp fall of over 80 percent. Unlike a stock or a bond, it is hard to determine the fundamental value of bitcoin. Its value is entirely dependent on what people think it is worth. Some boosters have claimed that bitcoin could be worth as much as $400,000 while others foresee a spectacular price collapse.

Bitcoin came into existence in 2009 and its first-mover advantage has enabled it to achieve widespread recognition and notoriety. Bitcoin and other cryptocurrencies have essentially created a new form of payment system that is based on blockchain technology, which utilizes a distributed public ledger system that is validated by a decentralized user network and whose integrity is derived from the usage of sophisticated cryptographic algorithms.

At present, bitcoin fails to fully meet the requirements to be considered a traditional form of money. Money serves three basic functions in a modern economy: It is a medium of exchange, it acts as a store of value and it is used as a unit of account. Despite recent support from PayPalSquare and other platforms, cryptocurrencies like bitcoin remain a niche payment method. Given the limited opportunities for using bitcoin to undertake normal day-to-day transactions, it is hard to consider the cryptocurrency as a viable or practical medium of exchange.

Additionally, the extraordinary volatility in the price of bitcoin makes it a poor unit of account. A common unit of account simplifies measurement of relative prices and facilitates the efficient exchange of goods and services. Wild fluctuations in the price of bitcoin (as highlighted by the now legendary story of Laszlo Hanyecz), make it infeasible for denoting relative price levels. In fact, stablecoins exhibit more future potential to act as a medium of exchange and unit of account than first-generation cryptocurrencies such as bitcoin.

At present, it is bitcoin’s role as a store of value that has generated considerable interest and much debate. Bitcoin has no intrinsic value of its own — a feature that it shares with modern fiat currencies. However, unlike fiat currencies (whose supply, in theory, is unlimited), a major part of bitcoin’s appeal lies in the fact that its supply is constrained (by design, only 21 million bitcoins are expected to ever be mined). Critics, however, note that there is nothing preventing the creation of any number of new cryptocurrencies based on the same underlying blockchain technology.

Techno-libertarians, some of the earliest adopters, are attracted to bitcoin as it is highly decentralized and utilizes a blockchain-based distributed public ledger system to record transactions. This contrasts with fiat money (such as the U.S. dollar), which is not only issued by a government-controlled authority but also requires trusted intermediaries (like banks) to maintain private account ledgers to record holdings and transactions of each participant.

Recently, bitcoin has attracted the attention of asset managers and large financial institutions. Rich investors are adding bitcoin to their portfolios as some of the stigma attached to cryptocurrencies fade. There are emerging signs that bitcoin has attained mainstream status as an alternative asset class. Rising demand and limited availability of bitcoins has contributed to the price surge.

Despite favorable recent developments, it is still extremely hard to…

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Bitcoin Sets New All Time High Spiking Over $35,000

Bitcoin’s record-breaking start to the new year continued on January 5 after the top crypto set another new all-time high (ATH) of $35,879. Based on this new milestone, the top cryptocurrency has now surged by more than 20% in just the first of five days of the new year.

Record-Breaking Start to 2021

Interestingly, the new ATH comes less than 48 hours after the digital asset briefly crashed to just under $30,000 in Monday morning trades. However, since staging another recovery, the digital asset’s traded volumes have also surged in the past 24 hours. Data shows that volumes surpassed $23 billion while the market capitalization now exceeds $635 billion. Nevertheless, at the time of writing, the top crypto has retreated to $34,850 per unit.

Bitcoin Sets New All Time High Spiking Over $35,000

Meanwhile, after the latest record-breaking performance, some bitcoiners believe the digital asset may well beat its own 2020 run. After starting the year valued at $7,334 according to markets.Bitcoin.com, the leading crypto went on to finish that year with a price 200% higher. Some experts attribute the BTC performance, which began after the infamous March 12 crash, to mainly the rising interest by institutional investors.

Institutional Investor Interest

Since the start of Q4 of 2020, many institutional investors and billionaires have acquired or endorsed BTC as a viable alternate store of value. For instance, bitcointreasuries.org, a site which tracks publicly owned companies that hold or have exposure to the digital asset, estimates that there are now 29 such companies. This interest has been instrumental in pushing up the price since the start of October 2020. Moreover, Glassnode reports that bitcoin’s (BTC) MVRV Z-Score has seen a sharp increase to values above 5. The MVRV Z-Score leverages blockchain analysis to chart periods where bitcoin (BTC) is massively over or undervalued relative to its ‘fair value’ price.

“It is now at the levels of the main bull market of 2017,” Glassnode said. “Note that in 2017, BTC made another 10x over the course of 6 months,” the researchers added.

In addition to the rising institutional investor interest, the decision by Paypal and Square to allow their customers to buy and sell bitcoin also increased the demand for the digital asset. According to some reports, clients of the two companies alone now account for all the 900 BTC that is mined every day.

Still, with many analysts predicting a BTC price of $50,000 by end of 2021, there is an expectation that the price will continue surging.

Do you think BTC will reach $50,000 by the end of 2021 or earlier? You can share your thoughts in the comments section below.

The post Bitcoin Sets New All Time High Spiking Over $35,000 appeared first on Bitcoin News.

Source: Bitcoinnews.com

JPMorgan says bitcoin could rise to $146,000 long-term as it competes with gold

Bitcoin’s remarkable ascent past $30,000 has stunned Wall Street — and one of the biggest U.S. investment banks thinks the digital currency could have much further to run.

In a note published Monday, JPMorgan made a bold long-term price target for bitcoin, claiming the red-hot cryptocurrency could rally as high as $146,000 as it competes with gold as an “alternative” currency. But, there’s a catch.

Bitcoin’s market cap — calculated by multiplying the price by the total number of coins in circulation — currently stands at over $575 billion. According to JPMorgan, it would have to climb by 4.6 times to match the $2.7 trillion of private sector gold investment.

For bitcoin’s market value to reach that level, its price volatility would need to drop substantially to give institutional investors the confidence required to make large bets. Bitcoin is known for its wild volatility, and it fell sharply Monday to briefly dip below $30,000 just days after reaching that level.

Bitcoin was up 1% in the last 24 hours Tuesday, trading at around $31,720, according to data from crypto market data provider Coin Metrics.

“This long term upside based on an equalization of the market cap of bitcoin to that of gold for investment purposes is conditional on the volatility of bitcoin converging to that of gold over the long term,” JPMorgan’s strategists wrote.

“The reason is that, for most institutional investors, the volatility of each class matters in terms of portfolio risk management and the higher the volatility of an asset class, the higher the risk capital consumed by this asset class.”

Crypto bulls have said that bitcoin’s recent rally is markedly different to a late 2017 bubble that saw it zoom close to $20,000 a coin, only to sink as low as $3,122 the next year. That’s because institutional investors are starting to buy in, and this is seen as a crucial confidence boost for the digital asset.

Skeptics view bitcoin’s 2020 rally — which saw it advance more than 300% — as…

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Is Bitcoin In a Bubble?

Founder and chief economist at Rosenberg Research, David Rosenberg, has doubled-down on his narrative that bitcoin, similarly to the stock markets, is in a massive bubble. He warned that another bear market could emerge, similarly to what transpired following the previous bitcoin bull run in 2017.

Bitcoin Is In A Bubble: Rosenberg

In a recent CNBC interview, the former top North American economist at Merrill Lynch said that he’s avoiding getting into bitcoin, especially after its impressive run that resulted in new records above $30,000.

He claimed that such a parabolic price increase in a relatively short period is “highly abnormal.” He went even further, saying that this is BTC’s “biggest market bubble.”

As such, he reaffirmed his stance from mid-December that bitcoin is an “extremely crowded trade.” Rosenberg also questioned the maximum supply of 21 million coins ever to exist, saying that when the asset reaches that cap, the protocol could be altered in order to produce more tokens.

Although he noted that governments are not responsible for bursting any bubbles, Rosenberg predicted that central bank digital currencies will eventually take over the market share of cryptocurrencies.

The economist further explained that BTC performed somewhat similarly during the last bull cycle in 2017. However, once the bubble exploded, the cryptocurrency went on a year-long bear market in 2018.

The Stock Bubble May Not Burst Soon

Rosenberg asserted that the stock markets are also in a bubble as the S&P 500 and the Dow Jones Industrial Average ended 2021 at all-time high levels, while Nasdaq came just inches away from a record. His research company concluded that stocks are about 20% to 30% overvalued “based on a whole bunch of different metrics.”

However, the economist said that stocks might not explode soon because of the global economic situation.

“What’s holding the boot together is basically zero interest rates. As long as rates remain where they are, unless we have a real dramatic pullback in economic activity, this bubble that we’re in is probably any time soon.”

Nevertheless, he warned investors wanting to get in these markets that they will be allocating funds in a bubble.

Instead of aiming to buy stocks and BTC, Rosenberg’s plan includes investing in areas that “are not bubbly and that have a lot of catch-up potential.” He named utilities and energy as such sectors.

Although gold also marked a new all-time high in 2020, he remains bullish on the yellow metal as it has “1/5th of the volatility that bitcoin does.”

Source: Crypto Potato

Why ‘Black Friday’ Was The Best Thing To Happen Bitcoin In 2020

March 12, 2020, will go down in history books as Black Thursday. That day began a two-day, more than 50% collapse in Bitcoin. It also shook the stock market, precious metals, and crypto.  

But yet, that fateful day in hindsight was the best thing to happen to Bitcoin all year and was a crucial factor in the asset achieving a new all-time high and trading near $30,000 currently.  Here are all the reasons why. 

Remembering The Onset Of Pandemic Panic In Early 2020

2020 started off roaring as investors had hoped, with the stock market setting new all-time highs and Bitcoin trading above $10,000. But within the first quarter of the year, the entire world changed due to the emergence of the pandemic. 

Anyone who was watching Bitcoin price charts on March 12, 2020, at the time had for the first time considered the cryptocurrency to be at serious risk. 

The panic-selling and cascade of stop-losses being hit as investors cashed out fearing the coming impact on the economy, took Bitcoin back to $3,800. 

But the catastrophic moment now marks the greatest historic example of contrarian investing ever and is largely responsible for Bitcoin setting a new all-time high in the same year. 

Why Black Thursday Was The Big Bitcoin Moment Of Truth

Capitulation cleanses markets of any remaining weak hands, and the shakeout from $10,000 to $3,800 did just that. It also instilled fear in derivatives traders on BitMEX – the then-market leader – enough to get them to stop risking liquidation of their BTC. The exchange has since fallen out of grace.

The price action also did two other things: it brought Bitcoin to an extremely attractive price point for newcomers, and at the same time confirmed the highest timeframe resistance turned support and that the bear market bottom was in. 

To save the stock market and global economy at the same time,  governments printed fiat money supply and issued various forms of stimulus. The efforts could drastically increase inflation over the next few decades, leaving investors scrambling for an asset with an upside.  

That asset has historically been Bitcoin and will continue to be due to its extremely limited supply and incredible long-term potential. Now that institutions are recognizing this, and at the same time see that upside in other markets is capped, the cryptocurrency could not possibly be more attractive. 

The rise in demand is reflected in the recent price increase and only further amplified by the impact of a recently halved supply. Without Black Thursday, the perfect storm for Bitcoin might not have arrived. 

Now that it’s here, it’s forecasted to take over the world of finance. 

Source: Bitcoininst

Bitcoin Logs Another Record High

Bitcoin careened to another record high on Wednesday amid concerns about this year’s huge stimulus packages.

The flagship cryptocurrency continued to attract capital from investors that view it as a hedge against fiat devaluation and inflation. On Tuesday, SkyBridge Capital investment revealed that it had invested about $182 million in Bitcoin ahead of its proprietary SkyBridge Bitcoin Fund LP in January.

“Bitcoin is digital gold,” its brochure read. “It is better at being gold than gold.”

More Institutional Capital

The news followed a renewed upside build-up in the Bitcoin spot market. The cryptocurrency started inching upward in the early Asian session, breaking above its psychological resistance-cum-support of $27,000. But its buying momentum picked up speed during the European trade hours that eventually pushed its price towards $28,580, a new all-time high.

Meanwhile, traders jumped ships after the US dollar index dropped to its lowest level since April 2018. There are expectations that the incoming Joe Biden administration would provide a broader stimulus package to the Americans impacted by the COVID-19 pandemic’s economic aftermath.

Bitcoin is up already up 300 percent in 2020 against a weakening dollar sentiment. Many analysts believe the cryptocurrency would continue its bull run heading into 2021.

“While a growing institutional presence has been part of the narrative of the current bull run, we may see increased retail interest in Bitcoin as a form of digital gold,” Paolo Arduino, the chief technology officer of crypto exchange Bitfinex, told the Guardian in an email.

The institutional investors, on the whole, now hold about $30 billion worth of Bitcoin off its $500 billion market capitalization, according to Bitcoin Treasuries.

A $30K Bitcoin

Technical pundits meanwhile suggest that Bitcoin would break above the $30,000-mark in the coming sessions.

According to Michaël van de Poppe, an independent market analyst, the cryptocurrency’s $27,000-27,500 support area serves as a leg for another upside run towards $30,000 and beyond.

As of late, the BTC/USD exchange rate was correcting lower after hitting the record high. The pair plunged by almost 4.5 percent to an intraday low of $27,331 (data from Coinbase), pointing to profit-taking sentiment. But that is still not enough to reverse its bullish bias, explains Mr. Poppe.

“Bitcoin broke the crucial trigger between $27,000-27,500 and continued its rally towards a new all-time high,” he tweeted. “If $27,000-27,500 sustains support, continuation is likely towards $30,000 and perhaps $32,800. Losing $27,000 and correction is imminent.”

BTC/USD was trading at $27,707 at the press time.

Source: Bitcoininst

This Altcoin Just Unseated Ripple’s XRP as The Fourth Largest Cryptocurrency

Things are not looking good for Ripple’s XRP. Following the news that the United States Securities and Exchange Commission (SEC) has pressed formal charges against the company, its native cryptocurrency tanked by almost 70%. This has also led to another somewhat unexpected event as Litecoin (LTC) takes the seat of the fourth-largest cryptocurrency by market cap.

LTC Now the World’s 4th Largest Crypto by Market Cap

Litecoin has become the fourth-largest cryptocurrency by means of total market capitalization. This follows a month of positive developments for the coin which is up more than 55% in the past 30 days.

ltcusd_chart
LTC/USD. Source: TradingView

Of course, the increase in LTC’s price is far from being the main reason for that. Ripple’s XRP, which occupied this spot until a few moments ago, has shrunk by a tremendous 70% over the past week. At the time of this writing, LTC’s total market cap stands at $8.14 billion, while XRP is behind with about $7.9 billion according to data from CoinGecko.

From Bad to Worse for the XRP Army

Things took a turn for the worse for XRP proponents earlier this month when the US watchdog, the Securities and Exchange Commission, pressed formal charges against Ripple. The SEC alleges that the company has conducted an unregistered securities offering worth $1.3 billion, essentially saying that it considers XRP to be a security. While Ripple has already said it intends to fight the suit, the damage appears to have been done.

Many exchanges, including the leading one in the US, Coinbase, already announced that they will halt XRP trading soon, causing a massive bloodbath for investors.

It’s also worth noting that there are some other big names in the industry, including Kraken, with serious exposure to the US market, who are still to announce their plans. If they follow Coinbase and Bitstamp, chances are that the price will suffer even more.

ripple-delisted

Although many claim that XRP isn’t a security, this remains to be proven in court and a legal battle of this magnitude can easily take years to resolve. Even if Ripple manages to disprove the claims and establish that XRP isn’t a security, the future is looking grim at best for XRP.

Source: Crypto Potato

 

What is happening with Bitcoin’s insane record run?

Bitcoin is crashing — upward. It just passed $28,000 and shows no signs of stopping.

The digital currency has a market value north of $500 billion. Think Bitcoin is just a fad? It’s worth more than Visa (V) or Mastercard (MA). Or Walmart (WMT).
Bitcoin passed $20,000 for the first time just 11 days ago. Now it’s knocking at $30,000’s door.
Its rapid rise has been remarkable — or insane, depending on your appetite for risk. But there’s some logic to the run-up: Investors are pouring money into bitcoin and other cryptocurrencies during the Covid-19 pandemic as the Federal Reserve sent interest rates near zero (and expects to keep them there for several more years), severely weakening the US dollar.
That makes bitcoin, comparatively, an attractive currency. There’s a set limit to the number of bitcoins on the planet, and investors believe that once the supply runs out, the digital coin’s value can only increase.
Also aiding in bitcoin’s soaring valuation: Big, name-brand investors are stockpiling it, and huge consumer companies are embracing it.
That’s adding a dose of validity and appeal to cryptocurrency for mainstream investors. For example, a top executive at BlackRock (BLK) recently said the cryptocurrency can…

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Bitcoin is irrelevant, says Kevin O’Leary

Kevin O’Leary told CNBC on Thursday that bitcoin is irrelevant to financial markets and too at risk of regulations to be taken seriously by institutional investors.

“Is this a nothing burger? It’s not even a single cell amoeba,” the O’Shares chairman said,
“I love to talk about it, it’s fun to watch it go up and down, but during the day, when the bell rings, I don’t talk to anybody that’s worried about this. They do not put capital to work in bitcoin.”

His comments come as more institutional players are piling in, validating bitcoin’s legitimacy as a store of value and hedge against inflation. Earlier this week, SkyBridge Capital invested $25 million into a new bitcoin fund, while last month, Guggenheim filed to reserve the right for 10% of its $5.3 billion Macro Opportunities Fund to invest in the Grayscale Bitcoin Trust.

O’Leary said that the concept of a digital currency will likely come to fruition in the future, but investors should be careful glorifying bitcoin while it has yet to fulfill a defined role in financial markets and while it could still be regulated. This year, bitcoin has skyrocketed over 200%, and many crypto bulls are forecasting an explosion of growth in 2021.

Though regulations could be coming for the popular token. Treasury Secretary Steven Mnuchin is proposing new rules that would require certain cryptocurrency traders to…

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