Bitcoin prices have seen extreme volatility in the last few weeks. After rising to nearly $20,000 in December, the cryptocurrency is currently trading at around $10,000. Amid reports that China is cracking down on cryptocurrencies and South Korea could ban bitcoin trading altogether, most cryptocurrency investors are worried. But many analysts predict that the bitcoin price would skyrocket in 2018. So, the recent decline in its prices might offer you an opportunity to double down on bitcoin.
Bitcoin transactions to become faster, cheaper, easier
Dan Ciotoli of Bespoke Investment Group said in an interview with CNBC that bitcoin price “could nearly triple” by the end of this year. The analyst said the recent decline in its value was driven by the “get-rich-quick-investors exiting the space.” They all wanted to get out an once, which led to the inevitable crash. The cryptocurrency has started recovering now, said Dan Ciotoli.
The Bespoke Investment Group’s blockchain analyst predicts that bitcoin prices would be in the range of $20,000 to $30,000 by the end of this year. The rise will be driven by bitcoin-denominated commerce. It would increasingly become cheaper, faster, and easier to convert the cryptocurrency into dollars, he told CNBC.
According to Ciotoli, much of bitcoin’s success this year would depend on the Lightning Network, which is expected to be rolled out in the next few months. It would help bring in new buyers by making the cryptocurrency transactions cheaper, easier, and faster. Ciotoli says he would be worried if people are unable to use bitcoin to ‘buy Starbucks’ or something by the year-end. The analyst believes the blockchain technology and cryptocurrencies are here “to stay.”
Ciotoli is not the only analyst predicting an astronomical rise in bitcoin prices. Data scientist Xoel Lopez Barata estimates that bitcoin could reach $55,530 per coin by the end of 2018. Barata says there is only a 10% chance that the prices would remain at the current level. Barata used the Monte Carlo simulation to predict the future movements in bitcoin prices.
Analyst says bitcoin could hit $100,000 by year-end
A few days ago, Saxo Bank analyst Kay Van-Petersen said in an interview that the cryptocurrency could end 2018 with prices between $50,000 and $100,000. In December 2016, she had predicted that bitcoin would jump to $2,000 in 2017. It took the cryptocurrency just six months to go from $900 in December 2016 to $2,000 in May 2017.
If her latest prediction pans out, the cryptocurrency’s prices have to rise nearly 900% this year to reach $100,000. Kay Van-Petersen says the virtual currency has been “building a foundation” and that it would soon “re-rate a bit higher.”
Meanwhile, a hedge fund manager says this could be the right time to buy bitcoin as the prices have declined by more than 40% from the December peak. BK Capital Management founder Brian Kelly told CNBC that when everyone is saying that bitcoin is dead for the umpteenth time, that’s the time “you start looking at it, on the buy side.”
Amid concerns that China, South Korea, Germany and other countries could ban cryptocurrencies, bitcoin is in a “hand-off” period. It is moving from retail investors in Asia to the institutional investors in the US, Europe, and Japan, Kelly told CNBC. He warned investors that buying cryptocurrencies when prices are high could prove dangerous.