This analysis is by Bloomberg Intelligence analyst Mike McGlone. It appeared first on the Bloomberg Terminal.
Bitcoin could continue doing what it has for most of its nascent existence, appreciating in price on the back of increasing adoption, but at a slower pace as we see it. The first-born crypto has had a tendency to add zeros to its price from around $10 in 2011. It took about four years to go from $1,000 to $10,000 in 2017, so doubling that time frame for maturation could get the price toward $100,000 in about five more years. Or the new technology could fail, but our demand indicators are positive. With the exception of stable coins, the rest of the crypto market is subject to excess supply and competition.
Bitcoin has a history of adding zeros Bitcoin’s foundation is firming for further price advances, if its history is a guide. Since initially reaching $10,000 in 2017, the benchmark crypto corrected about 70% and remains in an extended period of consolidation around that level. When Bitcoin first traded at $1,000 in 2013, it corrected about 80% and consolidated. About four years after initially reaching $1,000, it added a zero. Considering normal maturation, about double the time frame from $1,000 to $10,000 would come in around 2025, for Bitcoin to potentially add another zero.
Our chart depicts the 260-day annual measure of volatility heading downward. We expect the previous low around 37% in 2016 to eventually be breached as the nascent asset matures. Most demand and adoption measures indicate Bitcoin is more likely to stay on its upward path.
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