Bitcoin: Ten Years of Market-Crushing Returns are Coming
It’s no longer a surprise that bitcoin (BTC) is the best-performing asset of 2019. The largest cryptocurrency has more than doubled in value this year, generating massive returns that mirror the last major bull market. But according to Max Keiser of the Keiser Report, bitcoin’s mind-bending growth is only just getting started.
In a Friday interview with CNBC Crypto Trader, Keiser advised viewers to “stack Satoshis” like they’ve never done before. The perma-bull reiterated his price target of $100,000 per bitcoin and argued that the leading digital currency will outperform other assets for decades to come.
In Keiser’s view, it’s only a matter of time before six-figure bitcoin becomes reality. The pace and timing is immaterial at this point.
“The timing is immaterial. It is still going to outperform every other asset you can possibly imagine owning over the next five, 10, 15 years. Forget about timing. Timing is for people who think that, ‘I’m going to wait and buy it at a better price.’ And that is a bad way to approach crypto. Stack Satoshis!”
Read why bitcoin is by far the best-performing asset class of 2019.
How High Can Bitcoin Go?
Keiser isn’t alone in forecasting a huge bull market for BTC. Cryptocurrency venture capital firm Heisenberg Capital recently tweeted that it is “doubling down on bitcoin maximalism” en route to the six-figure price level.
We see the market rejecting everything, except BTC.
This has been our dominant investing thesis since 2011.
We’re doubling down on Bitcoin Maximalism with new capital.
As BTC climbs toward our 2011 target of $100,000, we believe everything except BTC will die-off.
— Heisenberg Capital (@HeisenbergCap) May 5, 2019
And it wasn’t that long ago that the chief executive of Morgan Creek Digital said bitcoin will eventually reach $500,000 due to its scarce supply and rising demand.
Even if we assume that bitcoin’s trajectory follows its historical trend, we are still looking at a six-figure price level in the very near future. To see why, we have to look at bitcoin’s major cycles.
Between the tops of the first cycle (2011) and the second cycle (2013), bitcoin gained more than 3,600%. Between the tops of the second cycle and third cycle (2017), the price gained roughly 1,600%. If we assume a similar halving in terms of percentage growth, the next major bull cycle will see gains of roughly 800%. That’s 800% from the December 2017 high. This would give us a price of around $185,000. This so-called realistic price forecast was recently presented by YouTuber sunny decree.
In terms of timing, the above-mentioned cycle will likely peak roughly one year after the next halving event, which is currently scheduled to take place in May 2020. Bitcoin’s quadrennial halving events have been known to spark large rallies one year in advance, which is consistent with the growth we’ve seen so far this year.
Of course, historical performance doesn’t guarantee future gains. It can be argued that halving percentage gains is a pretty arbitrary way of measuring future performance. There are no fundamental indicators that say bitcoin’s next parabolic rally must be half the size of its previous in terms of percentage growth. In other words, the above-mentioned scenario is by no means a guarantee.
That being said, long-term holders should be encouraged by the latest developments in the world of crypto. Some of those developments were laid out in a recent Hacked article that describes why bitcoin is surging. Against this backdrop, it’s not unrealistic to believe that the next cycle will produce higher highs than the previous peak. Read more: Bitcoin’s Next Four-Year Cycle Has Already Begun; Here’s What Investors Can Expect.
Bitcoin’s trading range narrowed on Sunday, with the price bounding between $7,900 and $8,100 on Bitstamp. At the time of writing, the BTC price was valued just below $8,000.
The underlying trend remains supportive of the bulls, with the relative strength index holding above 60 and the accumulation/distribution line hitting a new peak.
Bitcoin faces strong resistance in the $8,200-$8,300 region. A failure to break out of this range is considered bearish despite the bulls’ refusal to give up any ground. This is evidenced by the fact that the market quickly bought the dip from two weeks ago when BTC crashed suddenly after a whale liquidated 5,000 units of the virtual currency.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock. Chart via CoinMarketCap.