Bitcoin could see higher highs in New Year 2021.
Since trading at $17,879 on Dec. 11, the cryptocurrency exploded to a high of $28,077 before backing off to $26,731. It could move even higher on retail and institutional demand.
For one, according to Skyridge Capital, we could see a “tidal wave of institutional capital,” as noted by Bitcoinist. In fact, the firm says the cryptocurrency could see maturation as an asset class, and attract hedge funds, public company treasurers, insurance companies, pension funds, RIAs, banks, brokerage houses, and even a potential Bitcoin ETF.
At the same time, retail interest is picking up momentum.
In fact, as noted by Pantera Capital CEO Dan Morehead, “When @PayPal went live, volume started exploding. The increase in itBit volume implies that within two months of going live, PayPal is already buying more than 100% of the new supply of bitcoins.”
Three, a shortage of Bitcoin could send the cryptocurrency even higher.
As also noted by Morehead, “In the last seven months, we’ve had two huge shifts — one in demand, one in supply — both upwards. On the demand side, we’ve had public companies like PayPal enter the market. That shifts the demand curve much higher. At the same time, the supply of newly issued BTC was cut in half in May — as part of the every-four years Halving of bitcoin issuance. Fewer BTC are available. We titled our previous investor letter, Bitcoin Shortage. The price acts like there’s a shortage.”
Even better, analysts say Bitcoin could rally well beyond $100,000.
Citibank for example says we could see $318,000 BTC in 2021. Guggenheim is calling for a valuation of $400,000. JP Morgan says it could rally on a $600 billion catalyst, which includes just a 1% allocation from global pension funds and insurance companies.
However, when it comes to cryptocurrency, always be aware of what’s happening.
XRP investors for example just watched the crypto plummet 60.5% to less than 20 cents. All after Coinbase announced it would suspend trading on XRP starting Jan. 19, 2021.
According to Coinbase Chief Legal Officer, Paul Grewal, “In light of the SEC’s lawsuit against Ripple Labs, Inc, we have made the decision to suspend the XRP trading pairs on our platform. Trading will move into limit only starting December 28, 2020 at 2:30 PM PST, and will be fully suspended on Tuesday, January 19, 2021 at 10 a.m. Pacific Standard Time.”
The US SEC just charged Ripple and two executives with conducting $1.3 billion unregistered securities’ offering. “The complaint alleges that Ripple raised funds, beginning in 2013, through the sale of digital assets known as XRP in an unregistered securities offering to investors in the U.S. and worldwide. Ripple also allegedly distributed billions of XRP in exchange for non-cash consideration, such as labor and market-making services.”