The price of Bitcoin broke another record yesterday as it crosses the symbolic $10,000 threshold. Not content to stop here, Bitcoin continued to rally during the Asian session and tested the $11,000 level. The pace of Bitcoin appreciation has accelerated recently as both institutional and retail investors keep piling into the crypto market. The likelihood of a bubble doesn’t scare anyone.
I think that there is plenty of room for further Bitcoin appreciation. There are actually several reasons. Firstly, although institutional investors already have a foot in the crypto space, the inflow of money if far from over as many big players haven’t moved yet. The arrival of CME and CBOE derivatives will just make BTC investing much easier and will encourage skittish investors to take the leap. Secondly, several key projects, such as Rootstock or Lightning Network, which are built on the top of Bitcoin, that aim as improving Bitcoin’s scalability will be released soon. Finally, people are claiming that Bitcoin and crypto assets in general are in a massive bubble. Just before the dot-com bubble popped in March 2000, the market capitalisation of Nasdaq hit $6.7 trillion. As of this morning, the total market capitalisation of crypto assets stands at $330 billions…
However, one should keep in mind that there would be most likely a clean-up in the crypto space next year. Many blockchain projects will just simply not make it.
In my opinion, a correction sounds healthy, as the price of Bitcoin has been on a mad run for the last few months. Nevertheless, investors’ appetite is massive and any corrections will likely be short-lived, as investors would take advantage of the move to buy on a dip.