By Tanzeel Akhtar
Decentralized currency Bitcoin rallied last week, and on Friday, September 1, hit $5,000 per BTC, a new milestone for the volatile digital currency.
So far this year, we have seen abnormal fluctuations of BTC/USD, ranging from $1,800 to $5,000. As of this writing the BTC is trading at $4,061.7, in the wake of yesterday’s ban by China of initial digital currency offerings. However, the currency appears to be heading higher.
As Bitcoin continues to attract more interest and additional investors, there are a number of things worth questioning. What’s driving the price and what events should one be aware of when investing in BTC? Is BTC in bubble territory? How will regulatory changes impact cryptocurrencies?
Ted Moskovitz, a former SEC lawyer and the founder of DecentraNet, says Bitcoin will surely get much larger before the bubble, if indeed there is one, pops.
“While many view Bitcoin’s new all-time high as an indication of a bubble, this is simply not the case, and we are sure to see Bitcoin’s price rise to between $7,600-$10,000 by year’s end.” explains Moskovitz.
Forex markets see an average daily volume of over $5 trillion. If Bitcoin’s total market cap reached equivalence to one day of forex trading, explains Moskovitz, it would place the value of a single Bitcoin in the ballpark of $250,000. “If you prefer to think of Bitcoin as a commodity, then gold is a good baseline for comparison,” he adds. “Right now the global gold market stands at about $6.3 trillion.”
“It is estimated that only 10 million individuals had Bitcoin accounts at the start of this year—that’s .001% of the world’s population. This shows us that Bitcoin is still in a nascent phase, and as more and more people learn about it and more and more name-brand celebrities (e.g., Ashton Kutcher, John Cena, Floyd Mayweather) tweet about it, we are going to see adoption rise.”
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