#BITCOIN EXPERT PREDICTIONS DRIVERS#
#BITCOIN EXPERT PREDICTIONS DRIVER#

#BITCOIN EXPERT PREDICTIONS DRIVERS#

He sees continued strength in the demand drivers for BTC and other cryptocurrencies, while traditional funds and institutional market participants are launching crypto funds. Zubairi sees no nuance here: “I believe the slump in Bitcoin value is temporary.” In fact, he says that the suppression of (crypto) mining and other activities in China, for example, should actually lead to a more open and accessible market for bitcoin mining by producing more competition. Does the slump in price of Bitcoin represent temporary volatility or a long-term effect of government attempts to control or suppress the market, as in China?Īlthough Jean-Louis Schiltz – a lawyer whose areas of practice include fintech, and former Luxembourg government minister – agrees that sometimes fluctuating cryptocurrency prices correlate to countries’ political announcements or decisions, there’s no identifiable price trend relative to governments’ efforts to control or suppress the market He does believe that price volatility should stabilise, though, as the distribution of holdings increases and the power diminishes of the various ‘whales’ in the market to manipulate prices. So, what does that mean? Will demand fall off? Zubairi doesn’t think so, at least not in the near-term. being held for its value) – the price of Bitcoin and other cryptocurrencies is based on supply and demand.Īlthough Zubairi still has not come across what he would call a robust pricing model for Bitcoin, “demand,” he says, “is clearly there.” Like gold – of which some 40% of the world’s stock is in bullion, coins and central bank vaults (i.e. Similarly, Nasir Zubairi, who has worked for more than two decades in financial services and has been immersed in the fintech sector since 2011, draws comparisons to the price of gold. Valuation frameworks for commodities and currencies, he says, tend to be less precise, while traditional discounted cash-flow analysis applies more to equities, and interest and credit models to bonds.

While these approaches have both merits and drawbacks, Antonucci warns that they highlight the commonalities between cryptocurrencies such as Bitcoin and commodities and currencies – more than with cash-flow-producing instruments such as equities and bonds. And some theories even take into account cryptocurrencies’ cost of production and scarcity, as well as the size of the market they support and their velocity as they move through such markets.

#BITCOIN EXPERT PREDICTIONS DRIVER#

However, while the theory could contribute to some of the rise in cryptocurrency prices, all three of our interviewees reject the notion that it’s the main driver behind their rapid growth.ĭaniele Antonucci, a banker and economist, notes a range of approaches that attempt to value fairly all cryptocurrencies – for example, attempting to estimate their addressable markets and comparing that evaluation to their current market capitalisation.Īnother option is to view cryptocurrencies as a network that increases in value as more users are added. Investors subscribing to this approach buy potentially overpriced securities while ignoring valuations, earnings reports and any other relevant data – and therefore have no real regard for the fundamental value of those assets. The Greater Fool Theory posits that regardless of whether or not assets are overvalued, they can nevertheless be profitable if the seller can find a ‘greater fool’ willing to pay a higher price. If you want to know what they expect for the future of this fast-growing and ever-confusing market, read on… Is the rise in the price of Bitcoin (BTC) and other cryptocurrencies in recent years based on anything more fundamental than the ‘Greater Fool’ theory? So we asked three finance experts spanning the crypto divide – a banker, a lawyer and a fintech pioneer – for their cryptocurrency predictions and analysis. Should you regard cryptocurrencies as an investment opportunity? That’s a very big question with very different and conflicting answers…and many questions implied.Īre cryptocurrencies the future of currency? Will they challenge the stability of national or global financial systems? Can we expect banks to make cryptocurrency services such as wallets or trading available to retail customers any time soon?

Bitcoin expert predictions