Why Tim Draper thinks Bitcoin is here to stay
- The long-term Bitcoin faithful stood firm with his prediction but pushed it forward.
- The halving may have a role to play, and holders seem to have that in mind.
American Venture Capitalist and Bitcoin [BTC] investor Tim Draper has offered a fresh prediction into the potential of the digital asset. Draper, who has repeatedly maintained that he was bullish on BTC’s future price action, doubled down on his earlier $250,000 prediction.
Read Bitcoin’s [BTC] Price Prediction 2023-2024
But this time, the investor changed the timeline when he spoke to Bloomberg TV, in a recent interview.
Draper: “Why I extended the season”
According to Draper, Bitcoin might reach the said price in 2025. Answering the question as to why he pushed the moment forward, Draper opined that Bitcoin had been held back by several factors. He said,
“When I predicted earlier, I wasn’t expecting the U.S. bureaucracy to be this aggressive. The SEC’s regulation by enforcement has hurt the Bitcoin price movement. But Bitcoin is here to stay, and it’s a great system.”
Recall that the U.S. SEC has been very harsh toward crypto firms and projects operating in the jurisdiction. Although BTC has not been directly targeted, Draper opined that the persecution indirectly affected the coin’s price.
This was not the first time the renowned entrepreneur was making a prediction around the same value. It’s even more interesting that it came around the same period that Standard Chartered dropped a $120,000 forecast within the same period.
In 2021, Draper mentioned that BTC would hit $250,000 by December 2022. However, his prediction did not see the light of day as many unfortunate incidents rocked the crypto market.
Banks don’t like bitcoin because it makes them less relevant, so you are seeing their attempted manipulation over the weekend. #bitcoin $250 k by end of 2022, or early 2023.
— Tim Draper (@TimDraper) January 11, 2021
Now that the centralized ones are out
One major factor that led to BTC’s plunge at that time was the FTX collapse. And Draper did not hold back in addressing this part. He explained that the exchange crash was one of the reasons he had always been against the operation of centralized entities saying,
“FTX sent the message that we don’t want centralized currencies of any kind.”
After missing the earlier projection, Draper went ahead to say that BTC would hit the price in June 2023. So, now that the mid-year prediction did not come to pass, he considered it necessary to push it forward.
Draper added that the reason for his earlier prediction was that he thought that more retailers would recognize how important Bitcoin was. While he admitted that it hasn’t happened yet, he mentioned that it would soon happen. He noted that,
“I think it’s going to happen around the same time as the halving. And maybe, we will get my price target then.”
With the prominent investor’s fine tune of his previous prediction, curiosity, and discussions rose among crypto enthusiasts, who are eager to understand the factors behind this revised perspective.
Here for all the proceeds
Also, it seemed that a lot of participants were not interested in quick gains amid the projection that BTC’s long-term price action could be profitable. To address this, onchained, an on-chain analyst published his opinion on the CryptoQuant platform.
Onchained did this by considering the Long Term Holder (LTH) and Short Term Holder (STH) supply. For context, the LTH describes the Bitcoin cohort that bought the coin more than 155 days ago.
Conversely, the STH refers to investors that bought Bitcoin less than 155 days back. In analyzing the current situation, the analyst addressed what happens to both cohorts during bullish and bearish cycles. He said,
“During bullish cycles, characterized by rising Bitcoin prices and high levels of optimism, there tends to be a transfer of supply from long-term holders to short-term holders. This is visually evident as the red line (STH Supply) rises while the blue line (LTH Supply) declines.”
Realistic or not, here’s BTC’s market cap in ETH terms
When the above (quote) happens, it means that there is an influx of STH. In turn, this implies that participants are more concerned about quick profits. He also said,
“Conversely, during bearish cycles, characterized by falling Bitcoin prices and prevailing pessimism, there is often a shift of supply from short-term holders back to long-term holders. This is observed as the red line (STH Supply) decreases while the blue line (LTH Supply) increases.”
When a situation like the aforementioned arises, it means that BTC had moved from weaker hands to those willing to hold for the long term and accumulate more.
From the chart shared, the LTH supply was much more than the STH. So, this highlights how investor sentiment had shifted toward the long-term dynamics.