The entire crypto market is in green, with Bitcoin price yet again keeping above $10k at $10,225 while the trading volume remains strong as well above a billion dollars.
“The technical analysis is quite sound. We did end up making back into the range that we’ve been exploring lately and we’re now nestled comfortably in the lower-half of the inner-part of the channel,” wrote analyst Mati Greenspan in his daily newsletter Quantum Economics.
“The golden cross is behind us and the halving is still ahead. So let’s hope the trend continues,” added Greenspan.
A 4,826% Jump in Bitcoin Price
This is, however, just the beginning for Bitcoin as Head of Research at Fundstrat Global Advisors, Thomas Lee sees the leading cryptocurrency going to $40,000 before the Dow Jones Industrial Average could. “Absolutely” is what Lee feels about this target.
Dow is already trading near its peak at 29,394, and just inches away from 30,000 mark which Lee previously predicted will be hit before Bitcoin does. However, he sees Bitcoin jumping to 40,000, a jump of 290% before Dow spikes 36%.
But this isn’t all, he believes BTC could very well hit $250,000 or $500,000, in the long term.
“Today Bitcoin’s transaction activity is twice that of PayPal, seven times Discover Network. It’s the second-largest transaction network after Visa. And there’s four billion Visa cardholders; so if you get to… five million Bitcoin users, it’s almost a 100X increase in price,” explained Lee during his interview on “MarketBrief.”
Apart from the fundamentals like transaction value and active addresses, more awareness and adoption are the key to this growth in BTC value, according to Lee.
“Bitcoin is a network value asset, so the more people who hold it and find it useful the greater its price gain. It’s really a log function. Today, about 500,000 people use Bitcoin. So, for it to quadruple, you just need to double the number of users,” Lee said.
Geopolitical Tensions Favorable But Future “Uncertain”
Earlier this year, in his bitcoin price prediction, Lee shared that Bitcoin has broken above 200 day moving average which results in nearly 200% increase in price and halving in May is another potential bullish event.
Moreover, geopolitical tension is another tailwind and that’s why the deadly coronavirus outbreak he said is “good” for bitcoin.
“it’s creating an asynchronous or idiosyncratic event that makes Bitcoin more useful. China’s trying to contain its market. People want to move money freely, there’s geopolitical tensions, making Bitcoin more useful, but the coronavirus, I think, is ultimately a non-issue globally,” Lee said on Tuesday.
However, the future is “uncertain,” and there are a lot of ways to kill Bitcoin such as if there was a Proof-of-Work (PoW) attack on the blockchain, bitcoin network would be “destroyed.”
Also, “Governments could try to ban the off-ramping of Bitcoin. So to convert it back into fiat, they could tax it, or make it illegal. That would make it very difficult.”
However, Lee explained, “it’s a generational thing,” as revealed by the holdings’ analysis of Charles Schwab that puts Bitcoin in millennials’ top five investments.
“Just like young people adopted the internet, young people are adopting cryptocurrencies,” said Lee.
Better than the Traditional System
The flagship cryptocurrency, which is the king of the crypto market is also better than the traditional financial system.
In the financial systems, “too much money is paid to intermediaries. Today, roughly 6% of all GDP globally is paid to the financial system to manage trust. Bitcoin has been around for 11 years, and has never had a single fraudulent activity on its blockchain with $5 trillion of activity.”
But when it comes to bitcoin, the cost is “vastly lower.” Millions of dollars can be transferred in Bitcoin across borders with just a few dollars in cost while the same transaction would cost “5 to 10% of that – $50,000 to $100,000,” in the traditional system.