BITCOIN HITS A 40-DAY HIGH
What does the future hold?
BITCOIN’s value hit a 40-day high today as it exceeded $9,200. Bitcoin had a rough winter, but the crypto-currency has demonstrated a spectacular rise from the April 1 low of $6,425.
Hedge fund manager John Pfeffer, who was speaking at the Sohn Investment Conference, predicted that Bitcoin will easily reach $90,000 and if certain conditions are met it will get as high as $700,000.
He told CNBC: “The bear case is zero. I think people should think about crypto assets, Bitcoin, as a venture capital investment. It could go to zero but there’s a chance that they could be worth much more. And the case of Bitcoin, the $90,000 price would be what it would be worth if Bitcoin became equal to private gold bullion holdings, about 1.6 trillion dollars of total value compared to $150 billion or there about today. It’s a bet. It’s a risk that I think is interesting and I’d be willing to take.”
He explained his even more optimistic scenario: “On the higher end, you could get to higher values if Bitcoin becomes a major reserve currency i.e. countries begin to take Bitcoin into their reserves and in that case, it could reach several hundred thousand dollars.”
Pfeffer said that obviously the probability that Bitcoin could reach several hundred thousand dollars is “lower” but is “certainly a possibility”.
When he was asked when it would be realistic for Bitcoin to reach $90,000, in his view, he said we could see the number one digital coin there by 2020.
He also emphasized that Bitcoin is the “first viable candidate to replace gold the world has seen”.
He added: “In developing countries with collapsed currencies it is more important and could be more for daily use.”
Many analysts talk about the significance of having more and more institutional investors on board. Mr. Pfeffer also sees valuable opportunities in making Bitcoin available for high-volume investors: “$90,000 is, in my view, relatively low bar. That’s only about ten times the currency price. Right now it is mostly retail investors, not many institutional investors, I can see private sector institutional investors helping it get to that price in the next couple of years.”