Bitcoin is doing better than it has in a long time. The currency – which was trading for $64,000 per unit in April of this year – has suffered somewhat in recent months, experiencing some bearish behavior that ultimately brought it down below the $30,000 mark for a brief period. However, at press time, the currency is trading again above $60,000, and is only a few thousand dollars shy of where it was six months ago.
Bitcoin Has Reached a New Pinnacle
For the most part, everybody is happy… Everybody except Mark Yusko.
As a hedge fund manager, Mark Yusko feels that bitcoin is heavily overbought at its current price. He says that many investors are likely to sell their assets and take profits in the coming weeks, and this could hit the market hard.
In a recent interview, he explained:
There are a lot of people that think we could hit $100,000 by the end of the year. The stock to flow model says we should. I also wouldn’t be surprised of a little consolidation. Look, we’re up 40 percent this month which is only 15 days old.
What Yusko is speaking of is something that bitcoin traders have seen time and time again. The world’s number one digital currency by market cap often goes through cycles like this. It expands its price to great measures, but unfortunately, many investors are not patient and seek to cash in on their trades as soon as they experience good fortune.
Perhaps what Yusko says is right; that bitcoin does have a chance to reach $100,000 before the year is out. However, if everyone begins cashing out, there’s a chance this future will not become a reality.
One of the big reasons that bitcoin is exploding as of late has to do with progression surrounding bitcoin exchange-traded funds (ETFs) being considered by the Securities and Exchange Commission (SEC). The agency has long been anti-crypto, though now it appears several applications are making their way into the “consideration” pile on Gary Gensler’s desk.
For this reason, bitcoin is doing quite well. Yusko explained:
We’re excited, obviously, that people are recognizing that approval is likely imminent. We’ve been bullish on cryptocurrency – and bitcoin in particular – for a long time.
ETFs Are Really Gaining Traction
At the same time, he questions how long bitcoin can keep up its present momentum. He feels it is heavily overbought, and commented:
A pause that refreshes given how overbought we are right now wouldn’t surprise me. There is some risk of the buying the rumor, selling the news.
His feelings in the long run remain positive, as he also stated he thinks bitcoin could hit $250K in the next five years or so. He claimed that the currency had a finite supply and was a prime example of “classic supply and demand.”