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Bitcoin could potentially reach a record high of $210,000 by the close of this year, according to a new forecast from a well-known quantitative trading firm. Peter Chung, the Head of Research at Presto, shared this ambitious outlook during a CNBC interview on April 28.
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Institutional Investment And Global Liquidity Foster Optimistic Projections
The optimistic price goal is predicated on escalating purchases of Bitcoin by major institutions and an upsurge in global liquidity. Chung posits that these elements will elevate Bitcoin’s price to unprecedented heights.
Bitcoin has faced significant challenges, but these corrections were essential advances towards general acceptance, Chung elucidated in the interview. He characterized Bitcoin as a dual-purpose entity: it serves as a “risk-on” asset in bullish markets but transitions into “digital gold” during economic turmoil.
Bitcoin’s Reaction To Economic Stress Tests
As highlighted by Chung, historical patterns have demonstrated how Bitcoin behaves during crises. Events like the Russia-Ukraine conflict in 2022, the downfall of Silicon Valley Bank in 2023, and recent market pressures have challenged Bitcoin’s position as either a speculative investment or a safe haven.
While Bitcoin did not surge like gold during the latest market pressures, Chung anticipates it will “catch up” and exceed expectations by year’s end. Such responses to global crises are rare but interesting to illustrate Bitcoin’s evolving role in the financial landscape.
MVRV Ratio Indicates $210,000 Target
The $210,000 estimate is not a wild speculation. Chung initially discussed this target last January, employing a specific metric known as the Market Value to Realized Value (MVRV) ratio. This ratio contrasts Bitcoin’s current market value against the average price of coins that have been transacted.
Presto projected Bitcoin’s realized value for 2025 and applied a historical multiple of 3.5x to derive their target. Financial analysts commonly use this ratio to identify market extremes and potential turning points.
Concurrently, analysts attribute heightened activities by “whales” – significant crypto holders – as an indicator of bolstered market confidence. These large investors continue to acquire Bitcoin, even at current price points. They surmise that if this trend persists, BTC could soar past current projections, reaching between $300,000 and $500,000.
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Other Experts Forecast Similar Or Higher Values
Clearly, it is not just Presto that anticipates Bitcoin could attain the six-figure milestone. Robert Kiyosaki, the renowned author of the book “Rich Dad Poor Dad,” also predicts that the cryptocurrency could reach values between $180,000 and $200,000 by 2025.
Looking a few years further ahead, Kiyosaki has estimated that Bitcoin might achieve an astonishing $1 million by 2035.
While these predictions reflect considerable optimism in the crypto markets, it must be noted that ultimately, cryptocurrency prices remain subject to extremely volatile swings, regardless of how significant the analyses and trends appear.
Featured image from Unsplash, chart from TradingView
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