Bitcoin has always had a large amount of bullish zealots in its online community, and Wall Street analysts are beginning to warm up to the virtual currency as well.
How could they not? Bitcoin’s price performance has outpaced every other asset class over the past year, and just about every client has probably asked his broker about BTC at this point.
As Barron’s reports, one analyst is particularly fond of Bitcoin’s chances for an even larger bull run, driven by new expectations of how the asset will be traded:
[T]he idea that bitcoin could never be indexed and packaged and sold, falls apart the moment someone builds a bitcoin derivatives market. And it’s coming.
Fundstrat’s Thomas Lee thinks these developments imply a significant rise in institutional holdings of Bitcoin in the next six-to-eight months, and could lead to higher overall transaction volumes. Based on that and an expanded framework for valuing Bitcoin, Lee established a mid-2018 target of $6,000 per unit, implying upside of more than 45%. He still sees it hitting $25,000 by 2022. In a note he published Friday, Lee explained that the price of Bitcoin is 94% correlated to addresses and estimated transactions per user.
In other words, as the number of people who own bitcoin grows, so too does its price. These two factors are highly correlated, and if the current trend continues, we could see compounding returns drive BTC up around six-fold or more over the next five years.
Bitcoin was trading at $4,104.57 on Monday, down -0.16%.
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Analyst: Bitcoin Is Going To $25,000 By 2022
Published 08/21/2017, 09:18 AM
Updated 05/14/2017, 06:45 AM
Analyst: Bitcoin Is Going To $25,000 By 2022
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