Anthony Pompliano says he is 70%-75% confident that Bitcoin (BTC) will be reaching $100,000 in the coming years. During an interview with BloxLive.tv the co-founder of the cryptocurrency asset management firm Morgan Creek Digital Assets, he talked about Bitcoin and his price predictions for 2021.
Bitcoin Could Eventually Reach $100,000
Bitcoin is the largest and most popular digital asset in the market. It has been expanding during the last years and investors are trying to understand which is its growth potential for the future. Pompliano commented that Bitcoin could reach that price level because of supply and demand.
This virtual currency works through a consensus algorithm called Proof-of-Work (PoW). With this consensus algorithm, miners process transactions with specialized equipment (ASIC miners). Every single time a group of miners finds a block with transactions processed by the network, they are rewarded with 12.5 BTC at the time of writing.
Every four years, the number of BTC that miners receive as a reward is reduced by half. That means that in May 2020, Bitcoin is going to be rewarding miners 6.25 BTC per block. With this reduction in the supply of Bitcoin, the virtual currency is expected to experience a price increase triggered by a lower new supply and a higher demand for the asset.
About his predictions, he Anthony Pompliano said:
“In August of last year, I predicted bitcoin would go down to $3,000 before returning to $10,000. It essentially did that. Now I think it’s going to $100,000, but there will be more volatility: there will be parabolic runs like we saw in June and then there will be 20-30% drawdowns from that. Along the way a lot of people will call the top at these local highs they will be incorrect.”
There are several institutional investors that might not even be aware of the supply reduction of Bitcoin and how it affects the whole network. If new institutions enter the space and place their funds in Bitcoin, this would clearly be a legitimization for the whole crypto market. Facebook entering the crypto space is also a way to legitimize the market and which are the benefits related to cryptocurrencies.
At the time of writing this article, Bitcoin is being traded around $11,800 and it has a market capitalization of $210 billion.
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