This year’s Bitcoin price forecasts range from $22, 000 to $60, 000, which a popular economist and investor of BTC says is more likely headed for lower prices. According to Tuur Demeester, the leading cryptocurrency is unlikely to gain new highs before the year’s end. However, he adds that China may be able to help.
Many people call June’s price range at $5700 to be BTC’s bottom price. But Demeester claims that the bitcoin network’s on-chain activity does not yet support the crypto’s current valuation. In 2012, Demeester first recommended bitcoin as a viable investment and at that time, the crypto was still at $5.
Recently, he wrote in an article about profitability decline. According to him, bitcoin miners are facing a drop in profits of more than 90% in the last seven months. He explains that as a result of this, the miners have no choice but to have a huge part of their mining rewards to be sold off. They are forced to do this in order to pay for their operating expenses.
Demeester also predicts that the crypto space will likely still wait for next year before the US approves a bitcoin-based exchange traded fund. He does acknowledge that this year, bitcoin has had a strong institutional interest. But he also pointed out that the interest mostly comes from market makers and trading firms.
It means that the interest comes from institutions that don’t automatically view bitcoin as a good investment. Rather, to them Bitcoin is a way to make money off the markets’ volatility. There are still many institutions today that remain as long-biased, among them are pension funds and mutual funds.
These institutions are not yet ready to invest because they are not yet comfortable with the custody solutions available. Demeester doesn’t see so much of a positive outlook for bitcoin’s price this 2018. However, he says he can also see a few positive developments that might be able to initiate a price rally.
One of these possibilities is for China’s help. There is the possibility of bitcoin seeing a new upsurge of Chinese capital to flow into bitcoin. This is as a result of the Chinese Yuan’s depreciation this year. Due to China’s capital controls, it shows bitcoin to be an attractive option that people can use to move some capital out of the country.
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