It seems like only yesterday that I posted about Bitcoin overtaking its previous high of $20K, barely two months ago, and today we are looking at the premier digital currency piercing the huge landmark of $50K. Laszlo Hanyecz, the programmer who paid 10,000 BTC for a couple of pizzas (on May 22, 2010) wouldn’t have thought in his wildest dreams that the $30 transaction would back then would be worth almost $500 million within in a decade. I guess nobody can beat that for having the most expensive meal ever.
The astronomical rise that we have seen in Bitcoin over the last year or so has seen the premier digital asset touch this psychological level. But this is not the end, it might very well be the start of a bull supercycle, as many analysts are expecting. These arguments carry much more merit on the basis of sound fundamentals. Similar euphoria a few years earlier was met with Bitcoin skeptics and naysayers calling it a fraud, a Ponzi scheme, rat poison, and whatnot. But that was 2017 and this is 2021.
Bitcoin is riding high on a wave of positive sentiment, extremely constrained supply, ballooning institutional investment, falling US Dollar, digitization of the financial ecosystem & other macroeconomic factors are favoring Bitcoin’s recent move. The buzz around Bitcoin mainstream adoption started with Elon Musk’s Tesla announcing that it has bought BTC worth $1.5 billion — holding the second-highest corporate BTC Treasury holdings, just behind MicroStrategy.
Talking about MicroStrategy, It has made $2.3 billion in profits on its holdings already and it has an appetite for more after it announced today it would raise an additional $600 million to buy more BTC. If the raise is successful and it uses the proceeds to buy more BTC, MicroStrategy will have purchased $1.7 billion in BTC since August 2020 alone. This would ensure that it stays pegged at the №1 spot for corporate BTC treasury holdings.
Here’s the thing, if these big-name corporations and institutional investors are pumping billions in Bitcoin at these elevated levels, they must be expecting the premier digital asset to go much higher. Obviously, they are not in it for the pennies. That begs the question, how much?
Ever since BTC crossed its previous ATH of $20K, it has moved into an unchartered territory, where there is technically no ceiling, at least for now. Various analysts have given their expectations of the next peak based on various indicators, both simple and complex.
Glassnode chief technology officer and co-founder Rafael Schultze-Kraft calculated that based on its current position in the cycle, BTC/USD has the potential to go to $274,000 — an increase of 471%, in line with 2017 behavior. Messari analysts are even more bullish targeting $292,000 to be the next peak.
As outrageous as these estimates may sound, recent factors point that this actually can come true. Apart from the various factors discussed above, other factors like Bitcoin block miners selling far less than during previous bull runs despite spot price being far higher is noteworthy. This is actually contrary to the previous Bitcoin bull markets which were characterized by fingerprints of increased miner outflows of BTC.
In addition to all the above, Bitcoin posted the biggest weekly candle in its trading history. This follows the largest ever daily candle earlier in February. And not to forget, BTC added $9,800 or 25% of its value in the past seven days alone. Yes, there will be corrections on the way and crypto-stoked volatility will be a part of this game, but the digital gold rush is far from over.
Originally Published on Medium
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