Late November is celebrated in the United States as Thanksgiving, a federal holiday and time for family get togethers. It is also celebrated on different days in other parts of the world, primarily as an after-harvest feasting day, but Bitcoin has also had an attachment to the month, as well. In 2017, families across the world gave thanks to Bitcoin and their newfound wealth. No sooner had gratitude been expressed, then Bitcoin went on a tear and doubled in value in a month, setting a new all-time-high of nearly $20,000.
November of 2019 has not been that friendly to the world’s favorite digital asset, but after eight bleak days of decline, Bitcoin has been resurrected by the fates or by bulls, who finally decided to show up on cue for the holiday festivities. BTC has risen, if rising a few hundred dollars over $7,000 can be said to achieve that statement. It is now coasting along at $7,440, plus or minus $100, better than $6,500 where it had been days ago.
At occasions like this one, it is time to take stock of where we are, what we should be grateful for, and what might lie ahead. When NewsBTC looked back over the historical record, it found: “Bitcoin’s very first thanksgiving the crypto asset was valued at roughly a quarter, making it incredible to think that someday it could be worth a quarter of a million dollars per BTC. From the first Thanksgiving to Thanksgiving 2011, the crypto asset gained 757%, growing to $2.40. From 2011 to 2012, the leading crypto asset by market cap had another massive gain, of 412%, taking its price to $12.30.”
It is amazing to think that in just five short years, Bitcoin would deliver in excess of a “1,600X” multiple. It is no wonder that the investing world was taken by storm or that 2017 became a year of manic speculation, as “FOMO” reigned supreme. The following year brought us Crypto Winter and, to a degree, “sanity” back to the market. But, as Bitcoin has demonstrated on several occasions, it is not only a volatile asset, but a resilient one, as well. It bottomed at $3,130, and today, once again, it sits on $7,440.
What does the future hold in store for Bitcoin? A decade is actually a very short period of time for a new asset class. Valuation criteria has yet to be fixed upon, other than to say that investor sentiment drives value, and the prevailing narrative drives investor sentiment. Per analysts at CoinDesk: “Some analysts argue the nascent market has a long way to go before reaching maturity, as seen in traditional markets, where smoothed volatility and liquidity are important factors. While others imply scarcity inherent in its algorithm is the main factor for bitcoin’s perceived value, now and in the future.”
Other popular analysts like Alex Kruger have said that they believe BTC will eventually settle down in a relatively wide price range, more or less like other commodities. Kruger’s actual words are more direct: “Bitcoin will be something that settles into a range in real terms, still trends in nominal terms due to inflation, as most commodities do.”
Under this type of scenario, scarcity tends to drive pricing behavior, and if there is one certainty in Bitcoin’s future, it is that scarcity will grow with time, as halving events take their toll. The other issue regarding BTC is that timing is always up in the air. You may see a big lead up to next May’s halving event, or you may not. You may see an explosion after May in the year that follows, or you may not. No one has been able to pinpoint a price projection with a point in time, an exercise that Tom Lee at Fundstrat has already labeled as “foolish”.
Most analysts concur that Bitcoin has a long way to go to achieve maturity. As Willy Woo, a crypto on-chain analyst and trader, has said: “The price of BTC still had some ways to go in discovering a price ceiling. Anything between a [market capitalization] of $10 trillion to $100 trillion is fair game.” BTC’s market cap today is roughly $135 billion, a far cry from Woo’s guesstimate. If Bitcoin is to rival Gold, it will need to approach Woo’s lower limit, which, if you do the math in today’s terms, would equate to a price point of something in excess of $500,000 per BTC. I think we have a way to go.
For Bitcoin to ascend to those levels, there needs to be much more buy in from institutional investors and from the general public at large, but awareness keeps growing bit by bit with each passing year, as does scarcity. Oliver von Landsberg-Sadie, CEO of BCB Group, a regulated financial services enterprise for digital assets, believes scarcity will always be a factor, but that mainstream adoption is a distant thought. He does add this caveat: “I can tell you with great confidence that global adoption at established brands is growing steadily and purposefully.”
What will another year bring in the Bitcoin eco-sphere? It could be anything or nothing at all. In its previous ten years, only three have resulted in losses. That happens to be a very good track record, and here’s hoping that a year from now, we are celebrating Thanksgiving and giving thanks for another year of stellar performance from Bitcoin.