Freedom from the interference of the government or any other third party has long been one of the most attractive aspects for those investing in Bitcoin. True believers in the cryptocurrency found some support today after the CEO of a reputed cryptocurrency hedge fund backed its utility and potential.
Traditional fiat currency has been something that can be twisted and manipulated by governments to serve their economic needs. However, such amenability can often be a bane as too many corrective actions can produce spells of instability in the economy. The firm in question, Ikgai Asset Management has been cautious against such actions taken by the States and has suggested that cryptocurrencies such as Bitcoin can take advantage of these, on its way to mass adoption.
Speaking on the issue, CEO of Ikgai, Travis Kling said:
“It’s like a CDS against fiscal and monetary policy irresponsibility.”
Here, CDS refers to credit defaults swaps, an insurance-like financial instrument that triggers a payout when borrowers default on their debts.
Kling suggested that the fact that cryptocurrencies such as Bitcoin are free from any third party interference makes it more secure and guarded against any actions the government may take. Kling’s thoughts come in light of the mounting debt the U.S government has incurred over the past decade. Attempts to stimulate economic growth such as passing budgets with huge fiscal deficits and low interest rates on loans have the potential to trigger hyperinflation, which may lead to the U.S Dollar losing its value, Ikgai warned.
Such a scenario, Kling suggests, is the best possible scenario for the mass adoption of cryptocurrency. Kling’s statement comes despite the fact that the price of Bitcoin has fallen significantly from its $19,000 highs in December 2017. Kling further went on to say that Bitcoin perhaps, offers better value than a traditional investment asset like gold.
Ikgai however, isn’t the only firm placing its bets in Bitcoin’s favor. Morgan Creek Capital Management is also moving ahead with its plans to invest in the cryptocurrency by launching a fund that will deal with the infrastructure of the cryptocurrency world. Talking about the launch, CEO Mark Yusko said:
“We are in the middle of the greatest wealth opportunity … It’s beyond any of our imaginations.”
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Bitcoin will likely be valued at $100,000 with a market cap of over $2 trillion before the end of 2021
The entire cryptocurrency market seems to be on the brighter side of the market since the beginning of the year. A majority of the coins have recorded significant recoveries from their 2018 slump, a period during which most coins lost over 90 percent of their value, when compared to their all-time highs. Among all the coins in the market, Bitcoin [BTC] aka the digital gold, was noted to be making a massive comeback as the coin breached the $11,000 mark after nearly 15 months. The coin however, soon retracted to settle below the $11,000 level.
According to CoinMarketCap, at press time, Bitcoin was trading at $10,887.27 with a market cap of $93.549 billion. The coin recorded a 24-hour trading volume of $20.757 billion for the past 24 hours and saw a massive rise of over 17 percent over the past seven days.
Anthony Pompliano, Co-founder of Morgan Creek Digital Assets, predicted that the largest digital currency could rise to reach $100,000, before the end of 2021. Pomp added that he was around 70-75 percent confident in this prediction. He stated,
“As I have previously said, making predictions is difficult […] Part of my process as a professional money manager is forming a thesis (price target), identifying a timeline (date), and establishing a confidence level. And then constantly re-evaluating those three aspects of my thought process as I receive new information.”
Pomp however, listed six pointers that have to be understood beforehand. First, this prediction is not an investment advice, and people should do their own research before investing in the digital currency. The second is with respect to Bitcoin’s volatility, with Pomp remarking that since it was a highly volatile market, the coin could witness a significant fall before being valued at $100,000. He stated,
“I anticipate that there will be numerous 20-30% drawdowns from new all-time highs as the asset continues to appreciate in value. These mini-boom/bust cycles should not cause panic, but rather need to be understood as natural market dynamics whenever an asset gains significant value in short periods of time.”
Further, the partner of the investment firm stated that the rise would be driven by several catalysts. This includes institutional adoption, exchange-traded funds and retail product approvals, global instability, governments all across the globe manipulating currencies, markets and economy. He went on to state,
“The market cap of Bitcoin will reach $2+ trillion when Bitcoin is worth $100,000. This is less than 1/3 the market cap of gold and less than 1/40 the global money supply.”
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