As expected, 2015 was a turbulent year for bitcoin, with prices fluctuating between its 2015 low of $177.28 (Jan. 14) to its peak of $465.50 (Dec. 15).
But bitcoin’s boost toward the tail end of 2015 could mean a better 2016 for the digital currency that’s been garnering so much attention lately. With the rumors swirling that bitcoin’s creator has been discovered, that’s kept prices high, and some in the industry peg that bitcoin will have a strong start in 2016.
But what else is attributing to this projection? A Reuters piece digs into the slow growth in the money supply as being one that could give bitcoin’s price a boost. Citing the supply-and-demand theory, there’s some who’ve speculated that this could push bitcoin’s price up.
For example, Daniel Masters, cofounder of Jersey-based Global Advisors’ bitcoin hedge fund, believes that bitcoin could jump back around the 2013 all-time high of $1,100. His projections also have bitcoin surging all the way up to $4,400 eventually, according to Reuters.
But that may be far-fetched as many across the financial ecosystem have already called for bitcoin’s demise.
Still, what he attributes to the rise of bitcoin is the rising acceptance of digital payments and companies that have embraced bitcoin as a legitimate payment method. There’s also been an immense amount of attention given to the blockchain — the technology that powers bitcoin transactions.
Masters also suggests that the production rate in the bitcoin mining industry could also give bitcoin’s price a 50 percent boost from today’s price. Because bitcoin is still in its early stages, he believes its true potential has not been realized.
“If OPEC [Organization of the Petroleum Exporting Countries] came out tomorrow and said, ‘In six months’ time, we’re going to halve oil production,’ the oil price would instantaneously react. But the bitcoin market is still in its infancy, and I don’t think that factor is discounted into the price fully,” he told Reuters.
Bobby Lee, CEO of leading Chinese bitcoin exchange BTCC, was quoted as saying that bitcoin could surge as high as $3,500 by the summer of 2016. The value of all bitcoins in circulation today is $6.5 billion.
“Today, the worth of bitcoin is $1 per capita in the world [population],” Lee said in an interview. “For such an innovative, decentralized digital asset, I say, ‘Boy, are we undervaluing it.’ But it takes a while for people to realize that.”