The Bitcoin price surge continues unabated, with new record prices being tallied every day, and bellwether investors split between those calling for them to go even higher and those cautioning against a price correction.
The $4,000 barrier has now been shattered, and Bitcoin is demonstrating intriguing strength following the August 1 soft fork that also saw the birth of Bitcoin Cash. The success has been so consistent that Standpoint’s Ronnie Moas quickly raised his short-term forecast of the next Bitcoin price surge from $5,000 to $7,500. In an interview with CNBC on Monday, Mr. Moas recognized that the increased activity and continued success of Bitcoin has opened the floodgates, pulling “deep-pocketed individuals” into the race, to the tune of hundreds of millions of dollars.
Other analysts are more cautious. According to Business Insider, Goldman Sachs chief technician Sheba Jafari warns of a price correction that could send the price plummeting to below $3,000.
Both of these statements are likely great news to investors simply because both of them are likely to happen, and both will generate even greater returns for those with the money to play the big game.
Bitcoin has already demonstrated its ability to rebound from price corrections and dips, and its growing status in both the currency and investment communities has convinced a great many people that its resilience and value are permanent. The overall market sentiment seems to be, once again, anticipation of climbs to greater altitudes, with dips and troughs being inevitable but surmountable obstacles.
As such, a price correction to below $3,000 will be welcomed by armies of hungry investors, eager to buy low once again, and supremely confident of an even-higher rebound.
Can this Bitcoin price surge go even higher even faster? There is no reason why not. As most people are aware, Bitcoin is a finite resource. Only 21 million bitcoins can ever be mined, and the anticipated date of the mining of the final bitcoin is 123 years from now, in 2140. The odds are it will happen much sooner than this, as is the case of innovation fueled by a profit motive, the deadline established by experts often tend to be written far into the future, based on the knowledge of the day.
One can think, for example, of the building of the Hoover Dam in the early 1930s. It was anticipated that the heat generated by that much poured concrete would take 100 years to cool, yet the engineers were able to “terrace” the blocks resulting in faster cooling and a much more efficient building process. Such is the way of innovation. There always seems to be a factor that confounds original estimates into fractions of their former selves. The Hoover Dam may seem a long way from the innovations of cryptocurrency, but it was, in its time, a project of engineering with few equals.
With Bitcoin, there are some powerful mathematics behind the mining and the reward structures that may ensure that the final date remains within the year 2140, through a pincer-like configuration that makes mining ever-more difficult and expensive. Yet at the same time, the world is full of highly-motivated innovators who are extremely interested in capturing the market as soon as possible. It is truly a race between abstract theoretical difficulty on one side and the available muscle power of cheap computing power and electricity – combined with restless human innovation on the other.
Unlike fiat currencies whose values tend to increase in an inflationary pattern not necessarily in sync with its country’s GDP, Bitcoin continues to grow on the strength of its absolute finite-ness, in an unprecedented fashion. It’s a currency with no historical predecessor.
Is a further Bitcoin price surge ahead, or will it have an epic crash like tulip bubbles? The momentum points to the former, but “this time is different” would point to the latter.
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