Bitcoin’s dominance [BTC] in the cryptocurrency market was evident after the coin’s recent price fall caused a domino effect in the market. Considering it is the largest virtual asset in the ecosystem, the price of Bitcoin often affects the entire market collectively. As many users find it difficult to invest heavily in Bitcoin [BTC], they often take to altcoins to make short-term profits.
Tone Vays, Bitcoin enthusiast and crypto-analyst, stated that Bitcoin was the most viable option to “diversify your traditional portfolio,” and that other altcoins did not help improve a trader’s portfolio. He put forward the argument that every other crypto depended on Bitcoin and in the event that Bitcoin fails, all other cryptos will fall with it.
He added that altcoins usually go down faster in a bear market and witness flash hikes in a bull market, implying that the volatility attached was supremely high. According to him, Bitcoin [BTC] would eventually go up faster than altcoins, which would significantly drop the valuation of all cryptos, except the largest one in existence.
“If users want to hold Bitcoin, they should just hold the Bitcoin. If people want to speculate and trade other coins they should take that path as well but when it comes to portfolio diversification, we are talking about long-term investments and not speculative-risk laden trading.”
Tone Vays also spoke about the recent Bitfinex-Tether situation and discussed the possibility of Tether going down and its effects on Bitcoin [BTC].
He said that if Tether went down, it might be a blessing for Bitcoin [BTC] as more people would hold their money in Bitcoin.
However, he also put forth a counter statement, remarking that it was good news for Bitcoin [BTC], considering the fact that its prices had bottomed already.
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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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