Bitcoin exceeds one million rand, where to go next?

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As bitcoin crossed 1 million rand this week, analysts look to the next target, with some seeing 2 million rand by the end of 2021.

The prospect of a million rand bitcoin seemed fanciful only a few years ago, just as the bubble screams sounded when it cracked 300,000 rand in 2017. In retrospect, it was a bubble. The price fell 84% before starting its ascent until it is today.

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Bitcoin price in rand

Farzam Ehsani, CEO of crypto exchange VALR, says bitcoin that exceeds Rand 1 million should come as no surprise to those who have taken the time to learn about the asset.

In my opinion, while I expect volatility to persist, we are looking at a significantly undervalued Bitcoin asset and an undervalued cryptocurrency asset class overall, says Ehsani.

I expect that in the next few years we will see Bitcoin ten times from here, but there will be huge peaks and valleys along this path, as we have seen in the past.

While Bitcoin regularly breaks all-time highs, it is not the only asset class to do so. Stock markets around the world have also hit all-time highs.

So while one might be tempted to talk about the strength of Bitcoin, I think we are seeing government fiat currencies such as the Rand and Dollar weaken against a wide range of assets and services. real.

According to Jon Ovadia, CEO of crypto firm Ovex: I think we’re going to hit $ 150,000 by the end of the year. I was totally convinced we were going over $ 100,000 this year until Elon Musk started tweeting (implying that Tesla could sell some of his bitcoin, although he later withdrew) . If Elon had gone all the way, it would have been hard to see $ 100,000.

Dean Joffe, co-founder of crypto investment platform BitFund, believes the bitcoin bull run is probably just beginning, as all near-term indicators have shown 100% buying pressure. It’s rare, as usual, when an asset hits a new all-time high, the market signals selling pressure as investors attempt to claim gains on their holdings. The short term looks extremely bullish for bitcoin as it continues to trade above the 100 and 200 day moving average.

According to the Crypto Fear & Greed Index, the market is in territory of extreme greed, which means that as investors rush into the market to buy more bitcoins, the price is expected to continue to rise (although resistance levels can be expected in certain price ranges).

It’s important to note that when investors get too greedy, the market usually needs to undergo a correction, Joffe says.

With a market cap of over $ 1.25 trillion (R20 trillion) and with the influx of global institutions into this new asset class, we may continue to see a sharp rise in the price of bitcoin. According to Glassnode research, as supply continues to be an issue and demand increases, the price will continue to rise.

Joffe adds that the downside of this bull market may be regulatory uncertainty, as in South Africa, and government interference, which stifles innovation. However, based on past history, bitcoin’s breakthrough could signal the start of a final surge this year, before a consolidation early next year. Understandably, however, due to various economic and regulatory circumstances, this cycle may not follow past history, Joffe explains.

According to an analysis from the Kraken crypto exchange, if the price of bitcoin copies its performance in 2017, that cycle top could end up being around $ 96,355 for bitcoin. Pseudonymous crypto analyst, ‘PlanB’ has predicted that bitcoin will reach $ 98,000 (around 1.5 million rand) by the end of November and end the year at $ 135,000 (around 2 million rand) .

However, the market can turn at any time due to regulatory interference or other similar events. Therefore, it remains a fundamental principle to have a well-diversified cryptocurrency portfolio and a reasonable and healthy allocation to cryptocurrencies, Joffe explains.

Adoption by investors is one of the factors driving bitcoin. In the last month alone, more than 360,000 new people have become bitcoin holders. According to data from CoinMarketCap, the number of bitcoin addresses has dropped to just under 39 million. There is a proven link between the increase in bitcoin addresses and the price of bitcoin. Apple CEO Tim Cook recently confirmed he owns bitcoin, and if Apple were to announce a stake like Tesla or MicroStrategy, a sudden price hike could ensue.

Says Joffe: Arguably, traditional financial markets have been rocked by fear of inflation over the past 18 months due to Covid-19. To hedge against inflation, new investors bought cryptocurrencies such as bitcoin, causing prices to soar. As investors continue to wait for inflation data, bitcoin has emerged as the primary inflation hedge for traditional investors, especially at one time. [when] gold and other inflation hedges were down.

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