I’ve been asked by quite a few people recently whether it’s too late to get into Bitcoin.
“Surely it’s going to crash soon?” they say.
I said in a recent post that Bitcoin could get to USD 10,000 by the end of 2017. And I stand by that.
What’s behind the upwards momentum? Why is Bitcoin’s rise seemingly relentless?
Simply put, there are fewer sellers of Bitcoin who are willing to sell for less than USD 7,300 per Bitcoin at the moment.
A month ago, sellers were willing to sell a Bitcoin for less than they are today. At that time, they were willing to sell at USD 5,500.
Today, no one would sell a Bitcoin for USD 5,500. They would part with it at USD 7,300. Next month, that number may be higher still.
Why are sellers less willing to sell at these prices and only be willing to sell at higher prices?
(1) Because they think that Bitcoin has much further to go.
(2) They think that Bitcoin could be the dominant and eventual winner of cryptocurrencies.
I know that I definitely wouldn’t sell at these prices.
What would I sell my bitcoin for? Not for USD 10,000, not for USD 50,000 and not for USD 100,000.
I think that this could go for a long time and we haven’t seen anything like how this might end up.
So that’s the supply side. Who’s on the buy side?
The next wave of individuals who are attracted to the massive moves in Bitcoin (10x since Dec 2016). Bitcoin is getting easier and easier to buy and store for the man on the street (i.e. you and me). (See this post for the easiest way to buy Bitcoin now)
Spread betting firms for example have opened trading on Bitcoin and Ether. They need to buy the underlying (Bitcoin) to cover themselves against their punters who bet LONG on Bitcoin.
Banks and funds who want to offer their clients access to Bitcoin. (See this article about Goldman Sachs getting involved in Bitcoin. And this article about the CME offering Bitcoin futures by the end of the year.)
What will continue to drive the price up?
Demand to stay strong even as the price that sellers want for their Bitcoin rises.
If holders of Bitcoin won’t become nervous and instead become more steadfast holders of Bitcoin, then they won’t sell anywhere near these levels.
If that becomes reality, then who knows where Bitcoin could get to?