Some Analysts Say “Stay Away” from Bitcoin
The sentiment is that the current jumps aren’t going to last, and that there is only a seven percent chance that the asset will again reach its all-time high of nearly $20,000 this year, according to many options markets. Gavin Smith – chief executive of crypto firm Panxora – explained in an interview:
Our view for the balance of 2020 is still high volatility with a year-end of around $7,000 [per bitcoin] with a drive to new highs in 2021… Our view is that we still believe the markets are pulled on the one hand by the inflation hedge story driving bitcoin higher while at the same time, the global economy is suffering a massive demand shock with the potential to drive bitcoin lower.
The idea is that bitcoin’s present surges are only temporary, as people see it as a potential “safe haven” during the coronavirus pandemic. However, when the pandemic ceases, the currency is likely to lose much of its following given that the dollar will strengthen, and people will likely want to return to things as they were before the spread.
Others, such as crypto author and writer Jimmy Song believe that the asset has hit something of a snag and is not garnering heavy attention at press time, but that it may later down the line when the economy bounces back and more people are back at work. He states:
Until the prices rise in the grocery store, bitcoin won’t really start taking off. I suspect that’ll take another nine months or so… There won’t be as much money going into bitcoin while people try to survive.
The currency’s price has shot beyond the $10K mark a few other times earlier this year, though they really haven’t amounted to much, with bitcoin hovering about the five-figure range for what appeared to be mere hours before the currency dropped back to $9,000. This time, the circumstances seem different, as not only has bitcoin lasted above the $10K line, but it has continued to add more to its price.
Things May Continue as They Are
Just yesterday, for example, bitcoin was trading for a little over $10,700. Today, the currency has hit $10,900, thereby adding another $200 to its price. Given the situation, many analysts – such as Joe DiPasquale of Bit Bull Capital – believe that the bitcoin price is going to continue to surge in the coming weeks. He explained:
There are significant changes since March in the way that institutional investors view bitcoin. Now that institutions have moved into bitcoin in 2020, the price has shown more support over the last couple of months. We will not see a repeat of the March crash, but bitcoin will remain somewhat more volatile than equities.