Lee is a longtime Bitcoin bull who sees multiple reasons the cryptocurrency can move higher -- potentially exponentially. If crypto wallets climb to 50% of Visa by 2030, the implied price of Bitcoin would be $20 million, he said in the same report -- though he emphasized that’s a projection, not a forecast.
It’s also impossible to ignore the volatility and risk inherent in cryptocurrency investments. Big upward moves are often accompanied by downward ones, on both a short-term and long-term basis. A small number of investors, so-called Bitcoin whales, control a majority of Bitcoin and can have outsized effects on the price. Security is an issue, with theft possible and movement of the asset hard to trace -- one reason it’s become a favored vehicle for illicit ransom demands.
But if you’re looking for reasons to believe in the gains, consider the focus of JST Capital’s Louis Curran: China. He noted that Mu Changyun, the director of the People’s Bank of China’s Digital Currency Research Institute, said China had been so concerned about Bitcoin in the 2014-2017 time period that it feared for the sovereignty of the yuan.
Curran said that China countered this by starting work on the digital yuan and, he believes, capping the price of Bitcoin -- though he said it’s very difficult to tell when China is acting in markets. Now that China has made progress toward the digital currency, he sees Beijing as less worried about Bitcoin.
“Bitcoin has its best opportunity to move higher in the present environment because the Chinese aren’t as fearful as they were in the past,” said Curran, who is based in Singapore. “Now we’re starting to see the yuan strong on its own fundamentals so there’s less incentive to cap Bitcoin.”
This article was provided by Bloomberg News.