It takes a brave soul to bet it all on bitcoin. Yet six months ago, that’s exactly what one Redditor did, using $325,000 of equity to purchase 191 BTC. As one commenter put it: “Firstly, let me wish you good luck. Second, let me tell you how much of an idiot you are.” As bitcoin kisses the symbolic $10k threshold, a new wave of intrepid souls has emerged, willing to lay it all on the line in the name of bitcoin. Will history prove them to be shrewd or stupid? That all depends on which analyst you consult.
See also: The Cryptocurrency Market Cap Trends Higher – Commanding $300Bn This Week
Heavy Hitters Spar with Bitcoin
By whatever metric you choose to measure it, bitcoin has gone parabolic. Half a million newcomers are believed to be entering the market every day, and the bitcoin bounce is blessing everything from BTC domain names to cryptocurrency-related stocks.
Former hedge fund manager and major bitcoin investor Mike Novogratz has said he sees bitcoin multiplying four-fold by the end of 2018. But he’s also hedged his bets by saying there could be a 50% correction. The former Fortress hedge fund manager appeared on CNBC on Monday where he said:
Bitcoin could be at $40,000 at the end of 2018. It easily could.
Novogratz also predicted Ethereum tripling in value within the same period. Thomas Gluckman, head of marketing at Hong Kong’s Gatecoin exchange, also believes there’s still ample scope for growth. When quizzed about bitcoin on Bloomberg, Gluckman said:
I would still argue that it is highly, highly undervalued. If you look at the long-term potential of the technology in the next 10, 20, 30 years, $10,000 is cheap in my opinion.
Don’t Mention the B-Word
Within the past 24 hours, the term “bitcoin bubble” has peaked on Google Trends, though given the glut of analysts and investors who’ve been uttering the B-word of late, that’s no surprise. On CNBC on Monday, Citadel’s Ken Griffin invoked the old tulip mania canard, before adding:
Is it a fraud? No. But these bubbles tend to end in tears. And I worry about how this bubble might end.
If there are three things bitcoin’s original believers resent their digital currency being likened to, it’s a bubble, the return of tulip mania, or a reprise of the dot-com crash. Each of these analogies has been discredited at length, but that doesn’t stop them from resurfacing every time bitcoin pulls another bitcoin and rockets higher still.
We’re Gonna Need a Bigger Moon
A BNP Paribas spokesperson noted that whatever happens with bitcoin, they don’t see the trend breaking down anytime soon:
We are seeing a shift of resources now. Is this a misallocation or seeds of a really worthwhile shift? Time will tell. We suspect cryptocurrencies are here to stay.
Another analyst, Peter Tchir in Forbes confessed to “having some real trepidation at these levels”, before opining that “it has gone too far, too fast”.
As bitcoin has risen over the past few weeks, going from meteoric to parabolic, many fear the next stage could be catastrophic. A 50% retracement would still leave the majority of this year’s buyers sitting pretty at $5,000 a coin. In fact as one analyst pointed out, bitcoin could lose 85% of its value overnight and still be up 40% for the year. But for the late arrivals to the party, a serious crash would be hard to countenance.
“Bitcoin is Starting to Worry People in the Federal Reserve”
“Bitcoin has gone parabolic,” conceded Art Cashin on CNBC, before adding “that usually doesn’t end well.” Cashin continued:
“I think we’re in the fear-of-missing-out phase now…I am told – and take this with a huge grain of salt – that the movement is even beginning to worry some people in the Federal Reserve.”
Such has been the rate of bitcoin’s inexorable rise, analysts have been struggling to find a similar case for comparison. The most oft-cited stat seems to be the Dow Jones industrial average which climbed 82% in 1915, its biggest year. Bitcoin has outperformed that by 10x this year and it hasn’t even broken a sweat.
Everything seems like a bubble after the fact. But right now, we could just be getting started. That guy on Reddit who took out $325k equity on his house to buy bitcoin? His investment is now worth $1.9 million. The only way to find out whether this rocket is filled with paper straws or moon fuel is to keep going. One thing’s for sure: up this high in the atmosphere, things start to get scary. It’s a long way down.
Do you think bitcoin’s still got room to grow or are we due for a correction? Let us know in the comments section below.
Images courtesy of Shutterstock and Pixabay.
Bitcoin Games is a provably fair gaming site with 99% or better expected returns. Try it out here.
The post As Bitcoin Goes Parabolic, Analysts Voice Their Concerns appeared first on Bitcoin News.
Bitcoin.com is author of this content, TheBitcoinNews.com is is not responsible for the content of external sites.
Our Social Networks: Facebook Instagram Pinterest Reddit Telegram Twitter Youtube
