Until a couple of days ago, the popular cryptocurrency bitcoin has been having a great run. The cryptocurrency’s price crossed $1100 mark and held steady for a couple of days before falling down to $827. But this may be temporary according to Saxo Bank.
The Danish investment bank, in a report last month predicted that the value of Bitcoin is going to rise above $2000. The rise in price is expected to take effect after Donald Trump assumes charge of the White House as the 45th President of the United States. Some of the speculations behind this prediction include Trump’s plans to increase spending on infrastructure and potential rate hikes by the US Federal Reserve.
Bitcoin has already shown the world its capabilities more than once. The cryptocurrency’s price has crossed the $1000 mark twice in the past 9 years of its inception. Saxo Bank’s global macro strategist, Kay Van Petersen in the institution’s “Outrageous Predictions of 2017” report mentions,
“Cryptocurrencies are here to stay given the history of booms and busts in fiat money and debt excesses. Bitcoin as the face of cryptocurrencies benefits from this chaos. Emerging market powers eager to move away from being tied to the monetary policy of the US and the banking system as well as to adopt the blockchain as a payment system prove willing adherents as they adjust to zero interest rates and the decrease in systematic risk.”
Also, Petersen states the possibility of Russian and Chinese government partially adopting Bitcoin to offset the increasing influence of US Dollar as the global reserve currency. The word of caution issued by the People’s Bank of China recently is an indication that the country is open to Bitcoin, but at the same time, it is also concerned about the increasing volatility and potential losses it might cause to the citizens.
The latest fall in Bitcoin price is attributed to the Chinese central bank’s warning, leading to panic selling. If Saxo Bank’s predictions do come true, then this should be a temporary setback before the Bitcoin price rises again. However, the cryptocurrency community’s general sentiment in the coming days will play a significant role, for better or worse.
Ref: Fortune | Image: Cosmopolitan