Where do you think the current bitcoin price rally will lead us? Back to $20,000, maybe set a new record high at $30,000? For one analyst, all the factors indicate that the current rally could take us up to $100,000.
Naeem Aslam, the chief market analyst at ThinkMarkets, believes that the current rally has significant differences from the 2017 rally. These differences could be the reason the top crypto hits $100,000, a figure that would place its market capitalization at over $2 trillion!
In a note to investors, Aslam believes the revival stems from the mainstream appeal which the digital currency seems to have recaptured.
“The strong resurgence in the bitcoin price is mainly due to the renewed mainstreaming interest in cryptocurrencies and the technology which underlines it,” he stated. “Projects like Facebook’s Libra has provided a much-needed tailwind for this space.”
Aslam further noted that the trading volume is hitting levels last seen when the crypto was trading at all-time-highs over a year ago.
“Nonetheless, the most important thing was the 24-hour volume for bitcoin, It was at its highest level since December 2007 when the price was trading at $20,000. This shows that the game is on because of the mainstream enterprises jumping in this space,” he said. “This is because investors didn’t lose their interest when the first bubble busted, they simply moved on the sideline waiting for the next bull run to start.”
Institutional Investors Are Behind the Rally
According to Google Trends, a vast majority of “Buy Bitcoin” searches emanate from African countries. The region has continued to develop an appetite for digital currencies, even during the crypto winter. Nigeria produced the most searches, with South Africa and Ghana taking the second and third spot respectively.
However, despite the crypto gospel spreading in Africa, global enthusiasm is yet to get back to its previous levels. The search for “Bitcoin” is just at 10 percent of its 2017 figure. And with the price of bitcoin rallying in the past few months to a 15-month high, it only means one thing: it’s institutional investors who are behind the rally.
And indeed, there’s data to back Aslam’s claims. CME is enjoying record volumes for its bitcoin futures contracts. These contracts help institutional investors hedge their positions and are a favorite with professional investors. A survey by Fidelity Investments in May also revealed that institutional investors are getting into crypto, with 22 percent already having some exposure to digital currencies. 40 percent of the polled group also said that they were open to investing in cryptos in the next five years.
With institutional investors in the driver’s seat and the retail investors expected to throng back, $100,000 is a realistic target, Aslam stated saying:
To conclude, I do think the next rally is going to be a lot more stronger than the previous one, one can call it a bubble, but this time the range could very well be between $60,000 to $100,000