Bitcoin rallied to new all-time highs above $23,700 on December 17, before slightly sliding back to $22,545.76 at press time.
Meanwhile, according to statistician Willy Woo, bitcoin could be headed north to the next psychological level at $55,000.
“$100k Is A Ridiculously Low Target At Current Trajectory”
Bitcoin enthusiasts had long clamored for the mythical $20K price level for quite a while. Much to their delight, the cryptocurrency recently breached this level before teleporting past $23,000 shortly afterward.
Looking at exchange heat maps, there are currently very few resistance zones and zero regions with massive sell walls above $22,000. This suggests that bitcoin is likely to continue surging higher in the near-term. As a result of the general market sentiment and the sell-side woes, Woo observed that the $100,000 price tag is now a “ridiculously low target” for bitcoin.
In particular, the on-chain analyst noted that we are now at the point where the BTC Top Cap Model starts curving upwards. He believes the crypto-asset will continue on its monstrous upsurge into the coming year.
Zoomed view.
— Willy Woo (@woonomic) December 16, 2020
$100k is a ridiculously low target at the current trajectory.
$55k is the next landmark -> Bitcoin becomes a $1T macro asset bucket.pic.twitter.com/CVRDRlrooY
Woo put great emphasis on $55K as the next historic price feat because it would imply that the dominant cryptocurrency would have reached 10% of gold’s total market capitalization.
Gold is currently the most sought-after safe-haven asset and it has managed to amass a market cap of about $9 trillion. At a price of $50k and beyond, bitcoin would have stolen a massive market share from the precious metal.
However, not everyone is optimistic about the cryptocurrency’s growth.
Critics Abound
Bitcoin’s recent resounding upward trend has caught the attention of mainstream news outlets like CNN, Reuters, BBC, among others, that are cautiously reporting about the cryptocurrency. The news frenzy is an indication of the growing mainstream interest. This is further evidenced by the increasing number of traditional finance investors who are openly acknowledging bitcoin as a hedge and a premier store of value, to the dismay of naysayers.
One economist, in particular, is deeply skeptical about the upsurge holding for long. David Rosenberg, the president and chief strategist at Rosenberg Research & Associates Inc. recently called bitcoin a “massive bubble” during an interview with Bloomberg.
He argued that bitcoin has no proof of its “future supply curve”, positing that it is nothing more than a “follow-the-heart extremely crowded trade”. Gold, on the other hand, has a certain future supply curve.
“The one thing we know about gold, we know the supply curve of gold with certainty. We don’t know the future supply curve of bitcoin, people think they know but they don’t really know.”
Besides Rosenburg, Claude Erb is another observer toeing the line for the bitcoin critics. Erb came into the limelight after he published an extensive report lambasting gold’s utility as an inflation hedge.
In his latest report entitled “Bitcoin is Exactly Like Gold Except When it Isn’t”, he argues that bitcoin doesn’t have a proven track record as a hedge against inflation, a store of value, or a safe haven. He further states that the highest price bitcoin can reach is $74,000, explaining:
“Bitcoin’s price can arguably be decomposed into a questionable ‘bitcoin network’ fair price and a fair price deviation. Both bitcoin and gold are about 50% above their ‘fair prices.”
But despite the noise, the future is looking bright for bitcoin. The cryptocurrency is meticulously tracking the popular stock-to-flow model, as noted by quantitative analyst PlanB in a Dec. 17 tweet. The S2F model predicts that bitcoin could increase in price significantly if history repeats itself — which could help it hit the $100,000-576,000 price range by the end of 2024.
