Coinbase is on the verge of going public, Goldman Sachs is going to offer Bitcoin investments, and Chipotle even got in on the action by giving away $100,000 worth of the cryptocurrency to celebrate National Burrito Day.
Suffice to say, Bitcoin has come a long way toward becoming mainstream. The value of the cryptocurrency has also been on a tear, continually climbing to new heights over the past year, after an initial crash at the onset of the coronavirus pandemic. Much buzz is surrounding predictions that we are only at the beginning of the rally, and that values are set to soar much, much higher in the near future.
Speaking on Bloomberg TV on Wednesday, Jesse Powell, the founder and CEO of cryptocurrency exchange Kraken, illustrated his projections for Bitcoin prices by comparing them to the cost of luxury cars.
“It might be easier to understand if we measure it in terms of Teslas,” he said, noting that at current price, one Bitcoin is about $58,700, or roughly in the ballpark of a Tesla.
“Probably by the end of the year it will be one Bitcoin per Lambo [Lamborghini], and probably by the end of next year it will be one Bitcoin per Bugatti.”
This trajectory would require nothing short of sustained rocket power. A Lamborghini has a starting price of around $200,000. A lower-tier Bugatti costs about 15 times that much at around $3 million.
San Francisco-based Coinbase, the world’s most valuable cryptocurrency exchange at $68 billion, is preparing to go public in mid-April through a direct listing on the NASDAQ, where it is expected to trade under the ticker COIN. Kraken is may not be far behind. Powell told Bloomberg the company is aiming to go public next year.
Meanwhile, Goldman Sachs, one of the world's most prestigious financial firms, is going to begin offering private wealth management clients exposure to Bitcoin and other digital assets starting later this year, CNBC reported yesterday. By doing so, Goldman will be following in step with peer Morgan Stanley, which told financial advisors they could put clients in Bitcoin funds starting this month.
Shockingly, just a bit less than four years ago, the finance world had a dramatically dimmer view of cryptocurrency’s prospects. In September 2017, JPMorgan CEO Jamie Dimon proclaimed that trading in Bitcoin was “stupid” and that cryptocurrency was only useful “if you were in Venezuela or Ecuador or North Korea or parts like that, or if you were a drug dealer" or "a murderer."
Since then, the bank has done an about-face, has been researching the impact of digital assets on traditional finance, and has made plans to offer investment clients access to a cryptocurrency-linked debt instrument.
Further cementing Bitcoin’s staying power was Tesla’s $1.5 billion investment in the cryptocurrency, the company’s plan to accept it as payment for cars, and CEO Elon Musk’s boosterism of digital assets on Twitter and other social media platforms. PayPal has also said it would soon allow U.S. customers to buy items with crypto, CME Group announced an impending rollout of micro Bitcoin futures and Visa said it would launch a pilot program to test settling transactions using “stablecoin.”
With so many stars aligning in Bitcoin’s favor, it’s not surprising that many analysts and crypto entrepreneurs would be speculating that the sky is the limit in terms of future value, including some technical analysts who say chart patterns indicate an impending surge beyond $70,000. But as usual, not everyone is quite ready to jump into the herd with the bulls.
Bobby Lee, co-founder and former CEO of crypto exchange BTCC, recently told CNBC that Bitcoin’s rally could push it as high as $300,000 — but that values are likely to plunge and remain stagnant for a prolonged “Bitcoin winter” after investors get burned.
A cryptocurrency strategist meanwhile warned the network that Bitcoin prices are near an “intermediate” peak and overdue for a correction, which could be facilitated by the launch of CME Group’s mini futures.
“The whole rally in crypto is getting very long in the tooth,” Boris Schlossberg, managing director of FX strategy for BK Asset Management, told CNBC.
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