The price of bitcoin fell on Thursday by 0.4%, to $50,175, but is up 70% year-to-date. The price slipped earlier this week after Gary Gensler, the nominee to lead the Securities and Exchange Commission, said at his confirmation hearing that making sure crypto markets are free of fraud and manipulation was a challenge. Gensler has been viewed as an advocate for cryptocurrencies, given his previous work and teachings on the subject at MIT.
“In the near term, people see it surpassing gold as a store of value, so I think $1 million as a price target within the next 10 years is very reasonable,” Powell said of bitcoin.
Bitcoin believers expect it to replace fiat money, and the market capitalization of all national currencies combined could make up its worth, Powell said.
As the price of top cryptocurrencies hit all-time highs on Tuesday, a key sentiment index showed that crypto investors are displaying extreme greed.
A “crypto fear and greed” index, a metric published by Alternative.me, rose from 83 to 95 on Tuesday, suggesting a level of “Extreme Greed.” Similar to other gauges that track fear on traditional stock markets, this crypto index uses a number of metrics to measure investor sentiment from a scale of zero to 100, ranging from “Extreme Fear” to “Extreme Greed”.
The tool measures two primary emotions that influence how likely investors are to purchase cryptocurrencies: fear and greed. Extreme fear is indicative of investors being too worried, meaning they are more likely to retreat from the market, prompting prices to fall and that could mark a good time to buy, according to Alternative.me. On the other hand, when investors get too greedy, this could indicate cryptocurrency prices are due for a correction.
The index last reached the same 95 level on January 6, just two days before bitcoin hit its first record high of the year near $41,000. In due course, the price toppled to as low as $28,750 by January 21.
Factors used in the index’s measurement include current volatility, market volume, sentiment analysis on social media, market cap share, and Google trends data.
While Tesla shareholders are reacting positively to the news, it remains to be seen how shareholders would react if a decline in bitcoin’s price negatively affects Tesla’s future earnings, said Jerry Klein, managing director at Treasury Partners.
Separately, billionaire Mike Novogratz said Monday that he thinks bitcoin will more than double to $100,000 by the end of 2021. Meanwhile, cryptocurrency analysts expect Tesla’s purchase to reassure retail and institutional investors about adding or holding cryptocurrencies.
A subreddit called SatoshiStreetBets, much like the Wall Street Bets gang that pushed up GameStop shares among others, helped the token gain 800% within 24 hours.
Billionaire Elon Musk’s tweets have also powered it higher as he has clearly showed his love for Dogecoin. Musk delivered a slew of endorsements for the digital asset, including a photoshopped Lion King meme of himself holding up a Dogecoin logo of a Shiba Inu dog. He also tweeted “Dogecoin is the people’s crypto” and “No highs, no lows, only Doge.”
The coin isn’t as well known as Bitcoin or Ethereum, but it has seen short bursts of popularity in the last couple of years, with the latest Reddit frenzy pushing it to its highest price ever.
Its current price is around $0.045, but is still 300% higher than when the “Dogecoin movement” began in 2013.
Here’s a look at the top 10 states where the recent surge in Dogecoin popularity is occurring, according to cryptocurrency site bitreporter.com.
Bitcoin’s market cap could reach $1 trillion sometime in 2021 as investors take its reserve currency status more seriously, according to Garrick Hileman, head of research at Blockchain.com.
Major institutional players like Stanley Druckenmiller, BlackRock, Bill Miller, and Jack Dorsey have acknowledged that bitcoin is not only going away, but is becoming a reserve asset and validating the digital gold thesis, Hileman said.
Bitcoin has a current market cap of about $350 billion, while that of gold’s stands at roughly $10 trillion. This week the cryptocurrency gained 12% over two days alone, and was trading at $ on Friday.
“My expectation is that bitcoin will become a trillion dollar asset as early as next year,” the crypto researcher told Business Insider.
Blockchain.com observed a 39% growth in wallet creation year-to-date on its crypto exchange. That is about 17 million wallets created since December 2019.
The exchange saw a broadening of adoption and ownership of crypto assets this year as more people continued to want in on acquiring the token. As many as 100 million people own crypto assets today, according to Hileman.
He noticed a lot of the recent price action was driven by institutional investors, based on transactions that occur on the chain, and is unlike the retail investor frenzy of 2017. On-chain demand and other metrics suggest that the 2020 rally was driven more by institutional hedge funds, family offices, and money managers.
Hileman expects to see continued buy-in from retail and Wall Street investors going forward, rather than corporates. That’s because it is harder for bigger players to participate than professional investors who already have accounts and easy access to major exchanges, he explained.
For bitcoin’s market cap to reach $1 trillion, it would have to hit a price of $54,000 per coin next year – a 130% rally from where it’s at.
As for the US dollar, the researcher expects the world’s most popular reserve currency to be digitized sometime in the next five years. “At this point, the Fed is still taking its time because the Fed is happy with the way the world is,” he said.
The status quo is working well for the dollar because it is dominant through the SWIFT mechanism and the corresponding banking system, he said. The US government can also raise debt at attractive interest rates, supporting the dollar’s status. But a competitive challenge lies in the crypto space and in the rise of stablecoins.
In 2013, Hill had a special interest in the then 4-year-old cryptocurrency, since her work primarily focused on technology and data privacy. Tech junkies were just getting excited about bitcoins back then, so she decided to explore its value in the real world by testing what it would be like to live on the currency for a few days.
Hill bought some bitcoins for $136 each on the cryptocurrency exchange Coinbase, hoping to find ways she could use her new “money.”
Though she lived in San Francisco, a hot spot for tech startups and companies, there were limited options for her to spend any cryptocurrency. During that week, she lost 5 pounds simply because she was tight on food and transport options. She was also “constantly caffeine deprived” because no coffee seller seemed to accept bitcoins.
Hill decided to celebrate the last night of her experiment by hosting a dinner for at least 15 strangers at a sushi restaurant called Sake Zone – one of the few places that accepted the token. She sent an open invite on the social-networking site Meetup and to a bitcoin community on Reddit. To her surprise, more than 60 people turned up at the event.
She described the attendees as “a wild cast of characters.” Economists, entrepreneurs who were creating bitcoin apps and games, and two founders of the arts event Burning Man were part of the crowd.
The dinner bill came out to a whopping $957, which she paid for in 10 bitcoins.
“I felt guilty at the time, making Yung Chen accept $1,000 worth of funny money, because it was unclear to me whether Bitcoin should be worth anything at all,” Hill said, referring to the restaurant owner.
As of 2020, the restaurant owner and his wife had retired from the food business. That may partially be because of their cryptocurrency earnings. They hold about 41 bitcoins in total, or $902,000 today.
Bitcoin has had a wild ride this year, hitting record highs more than twice in the past month. The digital asset was trading at about $23,235 on Thursday.