The past couple of months have seen a relatively quiet front in the coin market with Bitcoin largely trading sideways. This has kept quite a number of traders hibernating pending when things look upswing.
Interestingly, a trader known as PlanB has predicted that in the coming weeks, Bitcoin would rally massively resulting in figures as high as $55,000.
As ambitious as the speculation, there was acceptable logic behind it. The analyst took cognizance of the fact that Bitcoin is a scarce commodity. There are possible 21 million bitcoins that could be mined. An early report by Cryptoinfowatch showed that 18 million of all those coins have already been mined.
The prediction which has been reported as an analysis by some news media claimed that the market capitalization of the premier coin would surge to $1 trillion by May 2020. It also stated that the coin would be traded at $55,000 then.
The PlanB prediction compares Bitcoin asset model with scarce commodities such as silver and gold.
This is not the first time there has been a speculation on the effects that Bitcoin’s scarcity would have on future price. Many hodlers of the asset who were early adopters have seen the price of the coin balloon more than their wildest expectations especially in 2017, when the cryptocurency reached an ATM of $19,600.
It is a possibility that the 2017 rally is responsible for the positive outlook on the potentials of a coin that has succeeded mainly as a store of value than a mean of transfer of such values.
It is possible that as Bitcoin becomes scarce that investors from the traditional markets would move their funds into it pushing prices much higher. We saw remarkable interest from the institutional investors in 2017. There is no reason why this would not reoccur if there is sustained bull run from Bitcoin.
Nevertheless, it is left to be seen if this recent prediction by PlanB would materialize. He stated that negative interest rates seen around the world from “predatory governments” would work in the favor of Bitcoin.
It is a known fact that many adopters of cryptocurrencies have hoped that it would give them a measure of control and independence from central authorities such as central banks. However, the drive for the regulation of the industry has seen many exchanges align their terms of service to comply with these agencies.
What is obvious is that Bitcoin has come to stay. If it would scale up to exchange for thousands of dollars in the next few months is best left to imagination.