Their analysis also pointed out that the release of improved mining equipment in the future would cause further drops in the cost of electricity for mining, bring in more miners and increase the hash rate.
From their calculations and analysis, Fundstrat expects the price of Bitcoin to be between $20,000 and $64,000 by the end of 2019. More specifically, they expect one Bitcoin to be worth $36,000 by then.
On Bitcoin being more secure, he compared banks to the Bitcoin blockchain and pointed out that banks were getting hacked frequently. On the other hand, the Bitcoin blockchain is yet to be hacked by anyone.
By “open to all”, Tim Draper meant Bitcoin was accessible to even the unbanked. He used undocumented immigrants without access to bank accounts as an example. With Bitcoin, they could send funds back home to their families.
He also touched on how Bitcoin worked well as a store of value compared to fiat currencies of countries like Argentina and Nigeria. People in countries with weak currencies can use Bitcoin to protect their wealth.
In short, Tim Draper stated that Bitcoin is a better currency and would become a global currency untethered by political influence.
It is true that people mine for various reasons but it would not be far from the truth to suggest that more investments flowing into the industry and more miners being powered up are signs that the technology is here to stay.
Another bullish sign is that big players in the finance sector are beginning to get involved in the cryptocurrency industry. NASDAQ has recently expressed interest in becoming a cryptocurrency exchange. Goldman Sachs is also considering opening a cryptocurrency trading desk. Once again these are signs that Bitcoin is unlikely to be a flash in a pan.
There are also already existing cryptocurrency businesses that are doing well. An example is Bitbond, a cryptocurrency lending platform based in Germany. The continuous success of such cryptocurrency lending platforms shows that more and more people have faith in cryptocurrencies. Institutions being prepared to lend against an asset is one of the ways to show that the asset in question is a bona fide one with a future.
Bitbond was established in 2013, secured a license to operate as a bank in 2016 and expanded their business to meet global customers’ demands in 2017. Bitbond allows both lending and borrowing of Bitcoin. This business has survived multi-year bear markets and still managed to grow bigger.
Lastly, the fundamentals of Bitcoin remain strong. The network isn’t congested and the fees are low. Segwit adoption continues to grow and the Lightning network is here. All these didn’t look so good in the latter part of 2017 yet the Bitcoin price was consistently going through the roof in spite of complaints about high fees and network congestion. Somehow, the fundamentals seem to be far removed from the price of Bitcoin in recent years. The fundamentals are stronger now but don't seem to have any effect on the price at the moment.
What’s your take on Fundstrat’s price prediction for the end of 2019? Do you consider their prediction a modest one?
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