Related COIN The Bitcoin Analyst Who Nailed The Run To $2,000 Sees $100,000 Upside Will Pricey Bitcoin Just Make The Rich Richer?
The jury is still out on whether bitcoin is just one giant bubble waiting to burst.
Saxo Bank’s Kay Van-Petersen, an analyst who accurately predicted the digital currency’s rise above $2,000, is now calling for further upside to $100,000 over the next 10 years.
According to Bloomberg’s Cory Johnson, the way that bitcoin is constructed implies it is meant to be a finite resource. As such, it will become more difficult to mint new bitcoins, and the scarcity value is an important part of the digital currency’s valuation.
But Is It A Bubble?
Meanwhile, the recent surge in bitcoin’s valuation serves as validation for the longer-term holders of the still mysterious currency. But this doesn’t take away from the fact that massive volatility has been known to swoop in at random times. For example, bitcoin shed 20 percent of its value in just a few short hours. As such, the bitcoin market remains heavily speculative — at least for the time being.
“While the long-term value of bitcoin may be in the eye of the beholder, the volatility is really in the eye of the speculator,” Johnson said.
Johnson also pointed out a factor which doesn’t bode well for bitcoin: the time to complete a transaction is worsening. Specifically, he noted that the average confirmation time to complete a bitcoin transaction soared to a multi-year high just shy of 1,400 minutes as opposed to this time a year ago when it was near zero.
He continued that potential fixes to this problem could in fact challenge the very nature of bitcoin and this is a key problem to fix to support prices.