A Wall Street analyst has predicted that after enjoying the bull run for a considerable span of time, the bear might finally take over the crypto sphere in the coming fiscal. Nick Colas stated on Wednesday that he had been following the bitcoin price graph for the last four years and he feels that 2018 will experience greater volatility in the background of Bitcoin soaring past 1600% in the current year. He feels that the price of Bitcoin shall linger in between the price range of $6500 and $22000. The price of Bitcoin was around $15750 on Wednesday morning.
The daily note published by Colas depicted that, “Bottom line: bitcoin can rally to $22,000 and still be reasonably priced, or plummet to $6,500 and also be correctly valued. We expect to see bitcoin trade for both prices in 2018.” He feels that the midpoint range of $14035 can be considered as a reasonable price point.
Colas is apprehensive about bitcoin losing its market share to competitors given the extreme price swings. “At least four crashes” of 40 percent or more also seems to be on the cards as per the DataTrek Research co-founder. He pointed out that, “Bitcoin and cryptocurrency are hard to value and their economic utility relies on use cases that are not yet built. Of course the volatility we’ve seen will continue.”
2017 has yielded great results in the market of cryptocurrencies which is at league with the yellow metal to become the ultimate safe haven of financial assets. Increased usage of digital payment methods worldwide has helped bitcoins in hogging the newspaper headlines.
Colas attained this price range by conducting comparisons in between the number of bitcoins and the amount of $100 bills presently in circulation. He wrote that, “Bitcoin’s primary ‘real’ use case right now is personal asset protection. Yes, that includes money laundering and tax evasion. But it also incorporates the legitimate desire of honest people living in countries with less-than-exemplary rules of law to shield some of their assets. At the moment, the primary instrument used globally for these purposes is the $100 bill.”
If the value of bitcoin arrives at 10% of the cumulative figure of $100 bills in circulation, then $110 billion split between 17 million bitcoins would produce $6500 approximately at the bottom end of the range. The upper range of $22000 could be arrived at by using 33 percent alternatively.
Colas penned down that, “at the average of the high and low, we get to $14,035. That’s not far off the current trading price, which gives us comfort we’re on the right track with our valuation.”
This would basically represent a drop by 11% from Wednesday’s price. He also added that, “the only way it goes substantially higher is if/when someone comes up with a large-scale business that uses bitcoin. That may come in 2018. But for now that scalable use case is asset protection, so that’s how we value bitcoin today.”
KryptoMoney.com publishes latest news and updates about Bitcoin, Blockchain Technology , Cryptocurrencies and upcoming ICO’s.
Subscribe to our newsletters and join our Telegram Channel to stay updated.
Tarunima Ghosh Laha
Tarunima Ghosh Laha is a Finance Post Grad from St. Xaviers who believes Finance is more than just Balance Sheets and Ledger creation. This filmy bookworm who believes she was a sloth in past life also nourishes a penchant of owning a private zoo someday. Equipped with a laptop and online Lexicon she is all set to give finance a glamorous makeover in the form of exciting writeups with bang on info and flashy new words.
Source : Kryptomoney