Bitcoin: This Time It Really Is Different – Seeking Alpha

Source

Bitcoin (BTC-USD) has appreciated by roughly 500% in under two years now. Incidentally, this is also about BTC's price appreciation since the Mid-March meltdown bottom about nine months ago. This illustrates a long-term double-bottom in Bitcoin during a crucial transformation phase in its developmental growth cycle.

Bitcoin's stellar gains as well as numerous other factors illustrate that extremely promising future prospects exist for the gold standard of the digital asset (blockchain enterprise) industry. By the way, it's not all about Bitcoin, but we'll get to that later.

BTC 1-Year Chart

Source

We see extremely strong lift-off lately, and I don't think it is anything like back in 2017. In fact, much has changed in three years. Various factors, including higher demand by institutional interests, imply Bitcoin's recent surge is just the beginning of a much more long-term advance higher.

Source

Citigroup's (NYSE:C) "leaked" $300,000 near-term price target for Bitcoin is one of many pieces to a very interesting puzzle. This information suggests that an increasing number of institutions, JPMorgan (NYSE:JPM) not excluded, are likely moving in before the next wave above $20,000 begins.

Source: Binance.com

We see that Bitcoin has been on a relentless rampage higher lately. As the U.S. dollar weakens, Bitcoin and other inflation-proof/-resistant digital currencies, and blockchain enterprises are likely to continue to move higher in the future. Increasing demand due to wider application and user growth in the "digital asset" segment should enable this phenomenon to progress quite quickly in my view.

Source

BTC has come a long way fast though, and we cannot ignore extremely heavy resistance coming up at $19,500-$20,000. Sell orders are quite stacked here, so Bitcoin may get some turbulence before a true breakout above $20,000 will occur.

Nevertheless, given Bitcoin's current technical, fundamental, and psychological backdrop, it looks like it is only a matter of time until $20K turns history.

We can see that Bitcoin's price action has moved in waves throughout its existence, and I don't see why this time it will be any different. The chart clearly illustrates that every subsequent peak in each wave is substantially higher than the initial wave's top. Thus, we estimate that Bitcoin's next significant top could occur at around 2022-2025, and at a price of anywhere from $75,000 to $275,000 (current EST based our widely-sourced data base).

Bitcoin's current dominance level of around 62.5% in the cryptocurrency complex is staggering, and I believe there are numerous blockchain enterprise projects that likely have a lot of catching up to do.

Source

As the coronavirus crisis unfolds, digital coins continue to become more popular and prominent around the world. Governments and central banks are devaluing their currencies around the globe. This is a key fundamental factor why digital assets can continue to take share in the decentralized global medium of exchange market.

Our Top 5 List

These are our top five transactional coins of choice for the future, and market caps on these can probably go much higher. All of DASH coins in circulation account for about a total market cap of roughly $1 billion, Zcash, about $800 million. These are not particularly big numbers in the greater scene of things. For instance, Facebook (FB) is worth around $820 billion, Tesla's (NASDAQ:TSLA) market value is about $540 billion. $800 million seems minuscule when you are talking about crucial components capable of revolutionizing the monetary payment system globally. In fact, I believe transactional coins remain extremely attractive here intermediate and long term.

Without getting too deep into technical I will keep it brief. Functional coins have an ability to perform and or assist with numerous tasks/functions across the sprawling blockchain industry.

Our Top 5 List

These are just several of the top functional coins we see having substantial upside once the $19,500-$20,000 level gets surpassed by Bitcoin. Swipe (SXP-USD) is an interesting option as well.

While Bitcoin has appreciated considerably in recent months, there is still substantial intermediate- and long-term growth going forward in my view. Naturally, when you are dealing with an asset class as volatile as the cryptocurrency complex, significant corrections are to be expected. Therefore, it is possible that Bitcoin could correct from recent highs.

However, I expect corrections to be shallow and very transitory from here, as strong underlying fundamental, technical, and psychological support should enable Bitcoin to move beyond $20,000. In our base case estimate, I expect Bitcoin to top out at a range of $75,000-$100,000 over the next 1-2 year period.

Bitcoin is a very volatile asset and is not suited for everyone. Numerous factors like increased government regulation, hacking, functionality issues (such as speed, cost, and scale), fraudulent activity, and other negative elements could impact Bitcoin's popularity and thus affect BTC's price negatively.

Therefore, for investors with low- to mild-risk tolerance, perhaps a position size of 3-5% of total portfolio holdings may be appropriate. For investors with higher risk tolerance, a position size of 10% or more of total portfolio holdings may make sense.

Please keep in mind that no one knows exactly how Bitcoin's future will play out. The digital asset could be worth a lot more than it is now several years down the line or it could be worth a lot less if negative elements begin to materialize surrounding the digital asset market.

Want the big picture?If you would like full articles, daily market updates,comprehensive technical analysis, trade triggers, portfolio strategies, options insight, and much more, consider joiningAlbright Investment Group!

Disclosure: I am/we are long ASSETS MENTIONED. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: This article expresses solely my opinions, is produced for informational purposes only and is not a recommendation to buy or sell any securities. Please always conduct your own research before making any investment decisions.

Read this article:
Bitcoin: This Time It Really Is Different - Seeking Alpha