A report out this morning in Finance Magnates discusses a theory that states Bitcoin miners could help drive the price of Bitcoin up to $36,000.00 by the end of 2019.
This comes off the back of a tweet, published by Fundstrat Co-Founder, Thomas Lee.
The tweet comes from a research paper published by Fundstrat which discusses how:
“The price/miners breakeven cost multiple has proven a reliable long-term support level; the likely trajectory of future mining infrastructure growth should underpin Bitcoin price appreciation into year-end 2019.”
Essentially, Lee is saying that because the mining economy is set to grow, based upon historical averages, Bitcoin could reach $36,000.00. This is paired with an idea that electricity costs are decreasing, and that mining has become concentrated within large scale farms and bigger operations. The paper states:
“We believe the current path of hash power growth supports a BTC price of about $36,000.00 by 2019-year end, with a $20,000 – $64,000 range.”
This is a very bold statement, one which may offer some good news to investors who are watching the cryptocurrency markets today. At the time of writing, Bitcoin is valued at $8,711.64, down 6.95%. Does Bitcoin look likely to hit $36,000.00 today? Not very
By the end of 2019, of course, if Lee is right, we could see a very different situation to hand.
What should we make of this?
Overall, you have to take these sorts of predictions with a pinch of salt, although, whilst it is wrong to be ultra-optimistic right now, it’s also wrong to be too pessimistic. Consider this, in the words of Finance Magnates:
“It’s been a rough couple of months for Bitcoin following the crypto’s December boom and subsequent bust; at several points since the beginning of the year, BTC has sunk below $8000, lows that it had not reached since 2017. However, some analysts believe that a recovery may already be underway; the coin has stabilized near $9000 over the last several weeks.”
The markets that we see now are as a result of a chain of different events. Events that have led the value of Bitcoin to rocket all over the place. Ultimately, Fundstrat argue that this will balance out, and, as mining becomes more lucrative, the value of Bitcoin will jump, surpassing its optimum value of $20,000.00, and reaching as high as $64,000.00, at least, that’s what Lees tweet suggests.
I will reiterate here that this is as a result of research carried out by Fundstrat and we aren’t saying that mining will cause Bitcoin to hit $36,000.00, it is however interesting that a firm as large as Fundstrat are publishing documents like this, considering it is such a bold statement, you must assume that what they are saying does come with good authority.
How Bitcoin performs over the rest of 2018, should allow us to develop a better understanding of what to expect from the currency, going into 2019 and beyond. For now, let’s track back and focus on our $20,000.00 target, after that, $36,000.00 could very well be in sight.
See the full report by Finance Magnates for yourself, here- https://www.financemagnates.com/cryptocurrency/news/bitcoin-miners-will-drive-btc-36000-end-2019-fundstrat-predicts/
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