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Where is Bitcoin’s price heading and when is the selloff happening?

The last time Bitcoin was close to $20,000 was 2017. But the high didn’t last long. It turned out to be a bubble, with its value snapping back mere months afterward. Is this deja vu all over again?

Bitcoin could possibly turn into a global market asset. Bitcoin is in a ‘Massive Bubble,’, David Rosenberg, founder and chief economist at Rosenberg Research, said Bitcoin “should be hitting $30-$40k during 2021 based on the current demand curve

The digital cryptocurrency’s price has lept by more than 400% since March.

The last time Bitcoin was close to $20,000 was 2017. But the high didn’t last long. It turned out to be a bubble, with its value snapping back mere months afterward.

Image by BloombergIs this another Bitcoin bubble?

BTC Markets CEO Caroline Bowler doesn’t think so. For one, its growth has been steady, rather than a surge riding off ‘FOMO’.

“The trading we’ve seen in 2020 has been a gradual appreciation, coming off a higher baseline than 2017-2018,” she told Yahoo Finance.

“2020 has also seen institutional investors, fund managers and traditional financial players all move into cryptocurrency and digital assets. This is not another 2017.”

eToro co-founder and CEO Yoni Assia described passing the $20,000 mark as a “momentous milestone”, adding that the demographic of people interested in cryptocurrency had shifted over the years.

Read: Eyeing $20k for Bitcoin? Try $300k for what Citibank calls “21st Century Gold”

Wall Street wasn’t exactly hot for bitcoin in the early days, but interest from institutional investors has been growing as they look for ways to shield them from the threat of future inflation.

Larry Fink, the founder and chief executive officer of the world’s largest asset manager BlackRock, said earlier this month that bitcoin could possibly turn into a global market asset.

Bitcoin is leading all other assets in returns

Recently, the CEO of Standard Chartered Bank said that widespread cryptocurrency adoption is “absolutely inevitable.”

Earlier in Q4 of 2020, PayPal announced that it would allow its nearly 300 million users to purchase and pay with Bitcoin and several other cryptocurrencies.

Recently, S&P Dow Jones Indices announced plans of launching crypto indices next year.

“From data programmers and blockchain scientists to plumbers and hairdressers, bitcoin has excited people from all walks of life,” he said.

Financial institutions, banks, and hedge funds have also invested in the digital currency. UK asset manager Ruffer recently updated clients about its new 2.5% portfolio allocation to the digital coin, according to CNBC.

Bitcoin is in a ‘Massive Bubble,’, David Rosenberg, founder and chief economist at Rosenberg Research, said.

Bitcoin is extremely difficult to value and is “not really a valid investment thesis.”  

The price currently vacillates between $23k and $24k. if you feel you’re missing out on when it was $3600 earlier in the year, you would not be wrong, but not entirely right, as experts have very high expectations for the top crypto.

Try $400,000,” says Scott Minerd, chief investment officer of investment bank Guggenheim Partners, who made that prediction to Bloomberg News recently.

Another big bull on bitcoin, Goldman Sachs alumnus Raoul Pal, tweeted that he sees bitcoin 10 times higher a year from now. His December 2021 target is $250,000, Pal said in an emailed comment.

More realistically, Alex Mashinsky, Chief Executive and Founder of crypto lending company, Celsius, told Finance Magnates that during 2021, he believes that Bitcoin “should be hitting $30-$40k during 2021 based on the current demand curve.”

Mashinsky specifically pointed to the ongoing “instability of the USD,” which he says “will drive many to Bitcoin.” However, this depends on at which point continual quantitative easing will cause USD inflation: “if we manage to continue printing and have no inflation, then BTC will grow at a slower pace,” he said.

However, Mashinky believes that the path forward will be a winding one, asserting that “we will see $16k before we see $26k.”

“We need mass adoption for sustainable growth in crypto, which means at least 500 million new users who come for a store of value and yield,” Mashinsky said. 

In other words, Bitcoin needs more people to hodl it for the long term.

Zac Prince, Chief Executive of crypto lending firm, BlockFi, is even more optimistic about where the price of Bitcoin could go over the next year. When asked about 2021, Prince said that he foresees Bitcoin headed somewhere between “$50K and $100K.”   

Read: After dropping $3000, Bitcoin nearing its all time high, but why?

Sell off in the near horizon?

All the hype around BTC’s jump over the $20k hurdle could be driving its maddening price explosion and that same hype could dwindle and cause it to drop.

Signs in the cryptocurrency’s technical chart point to a 25%-30% sell-off that’s likely to hit early in the new year, Miller Tabak chief market strategist Matt Maley told CNBC’s “Trading Nation” on Thursday.

In fact, since 2016, BTC has seen 10 declines of 20% or more, 7 declines of 30% or more and 4 declines of 48% or more.

Which country is pacing BTC’s growth? 

According to Philip Gradwell, the chief economist at Chainalysis, the market is being driven by North American institutional investors, where exchanges are sending 19% more transfers worth $1 million or more this year while Bitcoin’s price has been above $10,000 compared with 2017 when it was trading above those levels, he said.

JPMorgan’s analysts have predicted significant demand for bitcoin following the $100 million purchase of the cryptocurrency by MassMutual. The analysts believe that other traditional investors, including pension funds, will follow suit, leading to a conservative estimate of $600 billion demand for bitcoin.

A survey by Fidelity shows that the majority of institutional investors feel that cryptocurrencies have a place in their portfolios.

Important notice:  In no way, shape or form should this article in AMEinfo be interpreted as advice to buy or sell Bitcoins. AMEinfo aggregates insights for the readers so that they can increase their knowledge and seek advice, should they want to, from professionals on whether to invest, divest or make any related investment decisions in Bitcoin or otherwise.