Though cryptocurrencies were able to hit the mainstream last year as Bitcoin reached near $20K, the question remains whether or not it is going to stay or is this just a fad that will implode. There were a number of experts including Warren Buffet who made a negative comment about cryptocurrencies. In fact, Warren Buffet even compared it to rat poison.
According to JP Morgan’s report, cryptocurrencies are here to stay. As for the direction of its price, there are bullish predictions such as Tom Lee saying that it is not far from the possibility that Bitcoin is going to surpass its all-time high this year and reach $25K.
John McAfee who is a tech-driven and crypto diehard entrepreneur recently mentioned that he sees Bitcoin reach $1 million by 2020. Considering the fact that it’s only around 18 months away, does this prediction really make sense?
Is $1 Million by 2020 Doable?
Bitcoin has remained stable at around $6,200 to $6,500 in the last few months. There are those who see this as a sign that Bitcoin and the crypto market is maturing. On the other hand, there are also those who are thinking that investors are using Bitcoin as a store of value. Considering these realities, it is really possible that it could reach $1 million by 2020?
McAfee described that the growing number of transactions is a sign that the true value of Bitcoin is on the rise. He mentioned that Bitcoin is “escalating tremendously”. It has been reported that on-chain Bitcoin transactions throughout the third quarter of the year is the highest ousting the Q1 by 70,000 transactions. It was reported that Bitcoin transactions increased by approximately 3 to 5 percent in the past nine months. And this could make McAfee’s claim valid.
When it comes to the current downtrend, McAfee said that investors shouldn’t be fazed. He even described it as caused by “artificial pressures” and can only create “temporary” issue for cryptocurrencies.
He even thinks that the $1 million prediction is considered conservative. He pointed out that if you are going to track the “usage curve” of Bitcoin, it has the possibility of going higher.
Regulatory Changes and Institutional Investors
2018 was filled with regulatory changes over the last months. There are some countries such as India that made it difficult for crypto exchanges to operate by banning banks from transacting with crypto-related businesses. In addition to this, you also have China that has banned crypto-related activities and even went further by prohibiting malls and hotels from hosting crypto events. But not all countries are anti-crypto.
There are also those countries that have a more open-minded approach to cryptocurrencies. In the US, you have the US Securities and Exchange Commission considered Bitcoin and Ethereum as commodities. And also, there is a strong chance that a Bitcoin ETF might get approved soon.
Regulatory clarity is believed by many to bring institutional investors in the market. Though it is happening quite slow, many are still optimistic. This could potentially skyrocket the crypto market once again. In fact, a Bitcoin ETF is believed to bring billions and revitalize the struggling crypto market.