Bitcoin (BTC) has quadrupled in the last nine months, which means that another similar rally will generate $ 100,000 in the foreseeable future.
Dan Tabiro, co-founder of 10T Holdings, does not expect Bitcoin to hit $ 100,000 in the next nine months. But he said it shows how fast assets can grow and their long-term potential. He wrote:
“Remarkable was #bitcoin just 9 months ago at 4000. It’s almost 500% rally, so today. A 500% rally from here gives us 100,000 pieces. You do not think this can happen in 9 months, but it will just happen again. For what has been achieved in the last nine months. It is difficult to understand, mkt grows very fast. ”
Why is Bitcoin growing so fast?
Bitcoin has developed rapidly through 2020 due to three factors. First, it is clear that the halving of new supplies in May eased sales pressure.
Second, the increase in institutional demand has led to a significant increase in the buying pressure on Bitcoin.
Third, long-standing bitcoin holders continued to express confidence, which increased market sentiment.
For companies, the sudden fall in the bitcoin price to below $ 4000 in early 2020 was also a convincing starting point. It was one of the worst assets during the pandemic crash in March, throwing almost 50% on BitMEX to $ 3,596.
Since then, Bitcoin has shown resilience and resilience, eventually returning to all-time highs and breaking a new record above $ 19,982 on Coinbase on December 1st.
Meanwhile, investors like Michael Saylor, CEO of MicroStrategy, believe that BTC is in a much stronger position right now than the previous bull run. For example, interest in retail today is only a fraction of what it was during the peak of euphoria in December 2017.
Furthermore, the growing adoption of Bitcoin as a digital store with value and the need for each portfolio has strengthened the brand image among large investors along with standard institutional flows. All this increases the probability that a six-digit price tag was introduced early next year. Some analysts even predict $ 200,000 and up by December 2021.
As it is often referred to as “digital gold”, one of the strongest arguments for Bitcoin is to close the valuation gap with precious metals. For $ 9 trillion, Bitcoin’s market value of $ 300 billion is only 3% of gold. Achieving BTC $ 100,000 will reduce this gap to 23%.
Bitcoin has risen in price by 100% compared to gold since September, and now 1 BTC can buy more than 10 grams of gold. Meanwhile, analysts have noted record outflows from the gold market in recent months, some of which ended in bitcoin.
Correlation of Bitcoin Gold and S&P 500. Source: Cointelegraph Markets, digital asset data.
As the Cointelegraph reported, the US dollar could weaken further in 2021, which has traditionally strengthened both Bitcoin and gold.