Cryptocurrencies hit new highs as institutions and retail investors piled in.
Analysts including Anthony Pompliano, co-founder and partner at Morgan Creek Digital Assets, as noted by CNBC, says Bitcoin could rally to $5,000 by the end of the decade.
From there, it could rally to $1 million per coin.
“I think that bitcoin will eventually rise to become the global reserve currency. I think bitcoin will eventually be much, much larger than the gold market cap,” he told CNBC.
Mike Venuto, co-portfolio manager of the Amplify Transformational Data Sharing ETF, as noted by Business Insider, says we could see Bitcoin hitting $250,000 in the next three years.
NY Mellon said it would begin financing Bitcoin and other digital currencies. Elon Musk announced Tesla bought $1.5 billion worth of Bitcoin in January. Even Bridgewater founder Ray Dalio just said his firm may soon buy Bitcoin. Apple could be a buyer, too.
Then, Bitcoin tanked 10% thanks to Elon Musk
Over the weekend, Elon Musk tweeted:
“Money is just data that allows us to avoid the inconvenience of barter,” tweeted Musk, a major proponent of digital currencies. “That data, like all data, is subject to latency & error. The system will evolve to that which minimizes both.”
Musk then added, “that said, BTC & ETH do seem high lol,” in a response to a user who said gold was better than both bitcoin and cash, says CNBC.
Then, Janet Yellen made things a bit worse
Janet Yellen says important questions about legitimacy and stability are an issue.
“I don’t think that bitcoin … is widely used as a transaction mechanism,” she told CNBC.
“To the extent it is used I fear it’s often for illicit finance. It’s an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering.”
However, the last time Yellen brought down cryptocurrencies with negative comments, the pullback didn’t last too long. We also have to remember that retail and institutional interest is still quite strong for cryptocurrencies.