Bitcoin’s frenzied 290 percent rise in the past one year has left investors happy and analysts suspicious. Bitcoin hit $3,000 after which the Ethereum went past $400, giving investors a chance to rejoice. The maddening rise in bitcoin prices has also planted seeds of suspicion everywhere. Mark Cuban has suggested that Cryptocurrencies are the currencies of the future, but he doubts whether the rise of bitcoin will stay for long. What should we be looking after?
Goldman Sachs Thinks Bitcoin Will Rise Further
Bitcoin hit marginally past $3,000 in its all-time high, only to retract to $2,500 levels in a few hours. It has made the likes of Mark Cuban believe that bitcoin is a bubble. However, Sheba Jafri, Goldman Sachs analyst, has pointed out that bitcoin could rise further. In a note to CNBC, Goldman Sachs noted that Bitcoin will be falling to $1,857 very soon. However, this fall could be followed by another all-time high which could go up to $3,212 and $3,915. Such staggering increase in bitcoin prices could mean another high for the investors who believe that the cryptocurrency has run out of steam.
Are Big Investors As Excited?
Michael Novogratz, a hedge fund billionaire, announced two months ago that he will be holding 10 percent of his net worth into Cryptocurrencies, including bitcoin as well as Ethereum. During the period of his holdings, bitcoin excelled at $3,000 while the price for Ethereum multiplied six times. He sold ‘a bunch of coins’ post the highs, suggesting that the currencies had already maxed out their potential. He said that he has scaled his investment in these currencies. He owns a lot less coins now but maintains roughly 10 percent of his net worth in these coins.
What to Expect Next?
An important thing to note about Cryptocurrencies is that they are comparatively new and highly volatile. After reaching an all-time high, bitcoin was trading for 25 percent low in less than 24 hours. Ethereum proved even more volatile, as it traded 46 percent below its highs. That’s not all, the currency that hit $400, plummeted to 10 cents was a flash crash. This makes it quite likely that bitcoin and the cryptocurrency market could be in a bubble that will soon burst. When this happens, many investors will lose their capital and Cryptocurrencies could try to become a lot more stable on prices. However, till then, crashes should be expected.