Bitcoin Price hits above $6,000, Analysts predict $25,000 Target
The Bitcoin price hits a new all-time high Friday, breaking $6,000 for the first time on all the major cryptocurrency exchanges.
Its now presently above $6,000 as of the time of writing this post.
Now an analyst is predicting that 1 bitcoin will be equal to $25,000 within the next five years. In an interview with Business Insider, Fundstrat Global Advisor co-founder Tom Lee laid out two reasons for his prediction.
No 1 Reason
Lee claims that bitcoin’s price has a network effect equivalency. This means that the currency’s value will increase by the square of its number of users. In other words, the greater the number of users, the higher bitcoin’s value. According to Lee, 94% of bitcoin’s price movement in the last four years can be explained using this model.
No 2 Reason
For Lee’s enthusiasm regarding bitcoin’s price is the prospect of bitcoin replacing gold as a digital store of value in the future. “I think this next generation of young people view bitcoin as their store of value,” he said, referring to millennials as a key demographic that will propel bitcoin’s value higher. Lee estimated the bitcoin price point based on gold’s current market.
According to him, the current market for gold is worth $9 trillion. Assuming a 5% of overall asset allocation from this demographic goes to digital currencies helped Lee come up with a $25,000 price point figure for bitcoin. On a short-term basis, however, Lee has a more conservative price estimate of $6,000 for bitcoin within the next five years.
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