The bitcoin price crossed the $8,000 mark earlier this week, supported by a massive spike in buy volumes across all major cryptocurrency exchanges. Analysts explained that a sudden surge in demand from institutional investors and inflow of new capital may have triggered the surge in the bitcoin price.
$250,000 by 2022
On April 13, we reported that billionaire venture capitalist, early investor in some of the most successful technology companies like SpaceX, and cryptocurrency angel investor Tim Draper predicted the bitcoin price to achieve $250,000 by the end of 2022.
A price of $250,000 would lead to a $5 trillion market valuation of bitcoin. At its peak, the cryptocurrency market was valued at around $900 billion. It would require the bitcoin price to increase by more than 31-fold within a 4-year span for it to surpass $250,000.
When Draper initially released his long-term goal for his bitcoin investment, the cryptocurrency community and investors within the market shared the sentiment of Draper and agreed the $250,000 price target for bitcoin is a realistic goal, especially in the long-term.
Many investors in the cryptocurrency market are not in it for short-term profits. If that had been the case, the vast majority of investors should have cashed out in December 2017. Economists can argue the cryptocurrency market was in a bubble and that investors did not cash out at the all-time high of the market in December because of greed.
But, investors like Peter Thiel and Tim Draper disagree. Investors did not pull out of the cryptocurrency market in December after seeing massive profits. They did not pull out because investors truly believed the maximum potential of the cryptocurrency market will not end as a $900 billion market.
For bitcoin to evolve into a reserve currency as said by Twitter CEO Jack, Draper, and Thiel, it needs to hit a multi-trillion dollar market and compete with traditional assets like gold in terms of market valuation. The liquidity of the entire cryptocurrency market is nowhere near the liquidity of stock markets like the New York Stock Exchange (NYSE) and Nasdaq.
If bitcoin can evolve into a major currency that is used by billions of users, retailers, merchants, restaurants, cafes, businesses, and more, it will easily achieve a multi-trillion dollar market valuation. This potential of bitcoin is shared by investors like Draper, who truly understand the vision of cryptocurrencies and decentralized financial networks.
In the mid-term, Wall Street analyst and Fundstrat founder Tom Lee stated that the bitcoin price will likely achieve $25,000 by the end of 2018, as it rebounds from its correction and achieves a new all-time high.
“We still feel pretty confident that bitcoin is a great risk-reward and we think it could reach $25,000 by the end of the year,” said Lee.
Already, within a three-day period, the bitcoin price has recorded a 15 percent increase in value, from $6,900 to $8,000. If the momentum of bitcoin can be sustained throughout April and throughout the rest of the year, a recovery above its previous all-time high is possible.