Tim Draper Sees Bitcoin Price at $250,000 Although Banks Claim Bubble

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A wave of banks and major financial institutions have condemned bitcoin in 2017, as the bitcoin price reached its peak at $19,000. When the price of bitcoin fell from that high point to $6,000, the majority of self-proclaimed economists and bankers have called off the dominant cryptocurrency as a bubble.

Recently, one of Europe’s largest banks Barclays told its clients that bitcoin behaves like a flu because its value relies on new investors to continue purchasing the currency. New York-based Joseph Abate and his team of Barclays analysts wrote:

“As more of the population become asset holders, the share of the population available to become new buyers — the potential ‘host’ population — falls, while the share of the population that are potential sellers (‘recoveries’) increases. Eventually, this leads to a plateauing of prices, and progressively, as random shocks to the larger supply population push up the ratio of sellers to buyers, prices begin to fall. That induces speculative selling pressure as price declines are projected forward exponentially.”

However, the behavior described by the Barclays analyst team is the exact trend that is evident in stocks and other assets. If the rising demand of an asset cannot be met by the market, the price of that particular asset falls, and it is the basics of any market. The same concept applies to bitcoin and once investors can no longer support the price range of bitcoin at a certain point, its price falls.

The price of bitcoin has increased from $6,900 to $8,100 within a 30-minute period earlier this week, and several reports claimed the most amount of bitcoin was traded in the 1 hour of bitcoin’s corrective rally on April 12 than any other day in the history of bitcoin. The price of the cryptocurrency rose to a monthly high because investors could no longer sell the asset at the low price of $6,900.

With further emphasis on the long-term price trend of bitcoin, Barclays analysts wrote:

“We believe the speculative froth phase of cryptocurrency investment — and perhaps peak prices — may have passed.”

Investors in bitcoin, who are in it for the long-term, expect bitcoin to evolve into a global reserve currency, as Twitter CEO Jack, billionaire investor Tim Draper, and respected venture capitalist Peter Thiel said. For bitcoin to become one of the leading currencies in the world, which would be difficult given that no government exists to enforce the currency as a legal tender and its adoption purely depends on the public, it would have to achieve a multi-trillion dollar market valuation to compete with traditional assets.

Brian Kelly, a host of CNBC’s Fast Trader and the CEO at BKCM, said:

“It sounds crazy. But think about it this way: that’s four years from now. That’s a 3,000 percent return from here. But over the last two years bitcoin has had a 4,000 percent return. It would be a continuation of that trend.”

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