Bitcoin may hit $75k as institutions fuel demand

Dubai - The world’s biggest digital currency, which has a market capitalisation of over $900 billion, hit a record $51,721 price.

by

Sandhya D'Mello

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Bitcoin has risen eight-fold since last March and has added more than $700 billion in market value since September. —  Reuters
Bitcoin has risen eight-fold since last March and has added more than $700 billion in market value since September. — Reuters

Published: Thu 18 Feb 2021, 12:50 AM

Last updated: Thu 18 Feb 2021, 2:50 PM

Bitcoin will continue its bullish trend in the coming weeks and may test the $75,000 level on rising demand from individuals and institutions, experts say. Bitcoin charged to a record high on Wednesday, a day after the cryptocurrency vaulted the $50,000 hurdle, even as analysts warned about the sustainability of such prices amid elevated volatility.

“The main catalyst is institutional demand. More public companies are acquiring Bitcoin but have yet to announce their positions yet until they have completed their purchase,” said Bobby Ong, co-founder, and COO, CoinGecko.


The world’s biggest digital currency, which has a market capitalisation of over $900 billion, hit a record $51,721 price, fuelled by signs that it is winning acceptance among mainstream investors and companies, such as Tesla, Mastercard, and BNY Mellon.

Arshad Khan, CEO, Arabian Bourse, said: “There is certainly a push for bitcoin to be accepted as a mainstream payment mode. This is amply clear when top global blue chips have extended their support. The investor base is expanding across the globe with many first-time investors trying to explore this area and hence right awareness is very critical. This vibrant asset class has its own eco-system with transparency in transactions and a huge potential to be unlocked.”


Despite the flurry of mainstream acceptance this year, some analysts warned that bitcoin was still far from becoming a widely used form of payment.

Gabriel Abed, co-founder of Digital Asset Capital Management, said :"No one knows where Bitcoin's price will go. However, it's clear to say we are in a bullish market with the likes of Elon Musk and many other institutional investors joining the crypto revolution."

Bitcoin has risen eight-fold since last March and has added more than $700 billion in market value since September. JPMorgan questioned the “magnitude” of the jump on the back of a total flow of just $11 billion from institutional investors.

Khurram Shroff, chairman, IBC group, said: “The next target for Bitcoin is $75K, and it is going to happen sooner rather than later, primarily because of DeFI and DaPPs. Bitcoin maximalists are already looking to do different things with their Bitcoin, and as we speak, there is widespread adoption of Bitcoin, on a virtually daily basis.”

A few days ago, Miami announced it would be compensating its people in Bitcoin, and one of NFL’s first athletes got paid in Bitcoin recently. The UAE just announced all its government entities would start accepting crypto for governmental functions. While Elon Musk, Jack Dorsey from Twitter, and Michael Saylor have announced their participation in the Bitcoin ecosystem. Shroff has pledged 100,000 Bitcoin (current value of $4.8 billion) to set up the Miami 2.0 Blockchain Strategy Foundation and many other related joint venture projects.

“For the first time, Christie’s is doing an auction of a standalone NFT (Non-Fungible Token) work of art. Apart from that, many public companies are getting into buying Bitcoin as part of their treasury, while governments are now setting up organisations to hold digital wallets. Given all this momentum, the $75,000 level is very achievable,” added Shroff.

The price action of Bitcoin has been parabolic since institutional buying has come in. With the Chinese winter season and low mining activity, the large and sudden demand has catapulted bitcoin to unforeseen prices and technical charts do not work well in these uncharted territories.

Ashish Mehta, co-founder at Digitx, said: “The institutional demand is fuelled by the falling interest rates which are witnessing funds being pulled out of bond markets to be invested in alternate assets and bitcoin is one such – an alternate asset class. However, greater activity in the reallocation of corporate portfolios is expected after March. So, we might see some intense action then. Also, the Chinese mining industry will be trotting back online gradually now. So, we might witness some corrections at these levels. But we anticipate frenzy to pick up again after March. Bitcoin prices would test $100k in 2021 and settle somewhere between $60-75k by the end of the year.”

According to a recent Ark Investment Study, if all S&P 500 companies invest only one per cent of their cash reserves in Bitcoin, this will add another $40,000 to the price, so we are already close to the six-figure target, explains, Mohit Davar, Co-founder of Huobi Mena.

"While retail interest remains high it is the institutional acceptance of Bitcoin that is really driving the price rally. Tesla, MicroStrategy, PayPal, Morgan Stanley, Gray Scale, Square, Bank of NY Mellon and so many more institutions are now participating in the Bitcoin eco-system. We are at the cusp of the first ETF ( Exchange Trade Fund) to be approved in the US, we already have one recently approved in Canada and this will further fuel Institutional interest," added Davar. — sandhya@khaleejtimes.com


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