Have You Given Up On Bitcoin? This Firm Says It Could Test 64K Next Year
(Kitco News) -With bitcoin stuck below $10,000 this year after losing half of its value in just a few months, one research firm still sees massive upside potential for the popular digital currency.
The estimate for next year is an impressive trading range between $20,000-$64,000 per bitcoin, with the year-end BTC price at $36,000, investment research firm Fundstrat Global Advisors said in a report published on Thursday.
Bitcoin, which was last trading at $9,027, would have to rise sevenfold to see the higher end of that price range.
Fundstrat bases its analysis on how quickly bitcoin mining activities grow, including something called “hash power,” which refers for the speed at which computers solve mathematical problems to mine bitcoin.
“We believe the current path of hash power growth supports a BTC price of about $36,000 by 2019 year end, with a $20,000-$64,000 range,” said Fundstrat’s head of data science research Sam Doctor.
The permanent investors and traders of bitcoin are the miners, CNBC quoted Doctor as saying. “The primary net sellers, in our view, are bitcoin miners, and the rest are transactions between investors,” the report stated.
The cost of mining bitcoin — which is largely made up of high electricity bills — will be dropping with time and new technology. Lower mining costs in return will increase the number of miners out there, giving bitcoin solid support, the report pointed out.
Right now, it costs about $6,003 to mine one bitcoin using an existing bitcoin miner Antminer S7. Fundstrat forecasts for that price to go down to $2,368 thanks to a newer machine known as Antminer S9.
“The release of the next generation of rig hardware should trigger a new round of capex as well as hash power growth, which could accelerate if BTC price appreciates,” Doctor wrote.