At press time, bitcoin has spiked beyond the $11,000 mark and is trading for roughly $11,725. A few hundred dollars more and we’ll be at $12,000, which is where many analysts think the coin is headed next.
$100,000 for Bitcoin by 2021 Isn’t Too Far Off the Mark
After a rough few weeks in which bitcoin was battered from all sides (President Donald Trump submitted a barrage of tweets condemning the coin, while Facebook’s Libra was hit with a congressional hearing and potential delays), the currency has already risen by more than $2,000 since hitting a new low of $9,400. The currency has managed to remain resilient throughout the last month despite some negative press, and things are really starting to pick up.
In just the last 24 hours, the currency rose by roughly $800. Just yesterday, the coin hadn’t hit $11,000 and was trading for just over $10,900.
Anthony Pompliano, the co-founder of Morgan Creek Digital, argues that the currency will likely hit $100,000 by the end of 2021. This basically gives the currency approximately two years to strike six-figure territory and add approximately $89,000 to its overall price. While this may seem like a rough pursuit, Pompliano believes his prediction can come true simply because fiat is starting to lose a lot of credibility.
With inflation occurring every ten years, and the risk of economic downturns threatening global economies every two or three years respectively, bitcoin has, as Pompliano has explained in the past, beginning to look more like “digital gold.” Its upcoming halving event is also likely to send it into a whirlwind of price gains. He explains in a recent interview:
Whenever we get to a recessive period or kind of slowing growth, central banks have two tools: they can cut interest rates, which they did yesterday, and they can print money (quantitative easing). And so, when they do both of those things, it usually takes anywhere between six to 18 months to feel the effect of those tools, and what it’s going to do is it’s going to coincide with the bitcoin halving.
The halving will reduce the number of bitcoins being extracted by half. It is stated that approximately 17 million of the 21 million bitcoin units in existence have been mined, which means bitcoin is about to get a lot more valuable.
A Little Better Than Gold?
Pompliano also states that bitcoin has a few advantages over gold:
The difference is, between bitcoin and gold, with bitcoin, we know exactly how many are getting created, so 1,800 bitcoins are going to be created today. The second thing is we know the total supply available. So, it’s not, ‘Hey, I wonder how much is in the ground. We know exactly how much it is, and we can go and audit or verify the software code of the system.