Bitcoin Price Estimates Are Not Optimistic Enough

Bitcoin price has hit another new high…again. The digital coin surged past US$9,000 yesterday. Investors who’ve held on throughout 2017 are looking at returns of more than 830%!

bitcoin price

Source: Coin Desk

Everyone from Wall Street executives to venture capitalists have been weighing in their thoughts on the digital currency. Some are more sceptical than others. But throughout the debates, bitcoin has continued to climb.

It’s largely thanks to individual investors. According to Bespoke Investment Group, the number of crypto accounts on Coinbase has almost tripled to 13 million in the past year.

More Are Yet to Buy Bitcoin

And because more people are still yet to buy in, analysts have extremely bullish views on the coin going forward.

Hedge fund manager, Mike Novograt, said bitcoin could end the year at US$10,000. Had he said this at the start of 2017, investors would have thought he was crazy. But now, it’s looking like a real possibility.

Thomas Lee of Fundstrat, believes the coin could rise to US$11,500 by mid-2018.

But are these estimates not optimistic enough?

Time and time again, bitcoin has surprised analysts. They’ve had to increase their estimates multiple times just to keep up with the rapidly climbing price.

Yet so far, it’s only individual investors and very small hedge fund investors buying into bitcoin. What happens when the big money jumps in?

Big Money Doesn’t Want the Risk

Super funds, billion dollar fund managers and institutions are yet to buy into bitcoin. It’s not that they don’t want to make double digit returns in a day. They don’t want to accept the risk of buying into an unregulated market.

There are still real risks surrounding bitcoin investment. What happens if an exchange is robbed? What happens if an exchange withholds your bitcoins due to liquidity reasons? What about the daily buying limits?

These are just some of the risks that the big money doesn’t want to take on.

However, when a lot of these exchanges are finally regulated, you can bet a lot more money will move into cryptos. Until then, any bitcoin price prediction might not be far too low.

Cheers,

Härje Ronngard,

Junior Analyst, Money Morning

PS: Want to find out more about the secret world of bitcoin? Click here.


Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read.

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