A hedge fund trader and Bitcoin researcher recognised for his online alias “Spook”recently released a simple Bitcoin prediction making a solid case for $50,000 by the end of 2018.
Bitcoin has experienced the same bear cycles for the past nine years. The main cryptocurrency would increase in value by several hundred percent and plunge by 70 to 90 percent, recording a mid-term correction.
Particularly, in 2014, Bitcoin suffered its second-worst correction in history, having a record of over 80 percent loss in a year-long period. In a sense, 2018 has been a sped-up version of the 2014 correction, and a case can be done that the two corrections have the same concept because both were caused by the eruption of the retail or individual trader bubble.
How Can Bitcoin Reach $50,000 by 2018?
After a 70 to 90 percent correction, Bitcoin tends to grow by large margins to the upside; although, Bitcoin first needs to secure a really short period of stability, since crypto stability is equivalent to a couple of weeks.
This trend of the crypto market and the tendency of Bitcoin to record large gains and losses in a short period of time caused prominent crypto investors like BKCM founder Brian Kelly to say that traders must expect 50 to 80 percent losses if they expect 10 to 20-fold gains within a year.
This is what 50k looks like by the end of 2018 pic.twitter.com/ReUyvMBQl5
— Spook (@CypherSpook) July 6, 2018
The chart provided by Spook essentially anticipates that Bitcoin bottoms out at the $6,000 region and makes it reach its all-time high at $20,000 first, and eventually achieves $50,000 by the end of 2018, falling to its previous all-time high at $20,000 subsequent to reaching $50,000.
Considering a fall from $50,000 to $20,000 is equivalent to a 60 percent drop, $70,000 to $80,000 is more plausible mid-term target for the next Bitcoin bull rally. This is specifically applicable if investors expect the dominant cryptocurrency to experience an 80 percent correction in the future, like what it had three times in the past six years.
ETF is the Big Bet
CryptoSlate previously reported that, CBOE, the largest options exchange in the world, filed for a Bitcoin exchange-traded fund (ETF) with the US Securities and Exchange Commission (SEC), expanding the probability of the first bitcoin ETF being approved by the SEC.
CBOE Seeks SEC Approval for Bitcoin ETF
SolidX, another Bitcoin ETF developer, has brought in VanEck that operates around 70 ETFs and ETPs, to convince the SEC to approve bitcoin ETFs that will grant accredited retail investors in the public finance market to invest in Bitcoin with insurance and custodianship.
In May 2018, upon the release of several reports that claimed the parent company of the New York Stock Exchange is preparing to offer crypto custodianship, Kelly said:
Up to this point, it has been very difficult for them [institutional investors] to get comfortable compliance wise in holding cryptocurrency. If ICE has a custodian solution that is SEC compliant, that’s going to open the floodgate.
