Ronnie Moas Predicts Bitcoin Will Hit $400,000 Soon
In the summer of 2017 analyst Ronnie Moas predicted that Bitcoin would hit the $5,000 (£3731) price mark by the end of the year. Economists responded by calling his prediction highly unlikely, stating that the cryptocurrency had already entered a bubble and its prices would soon crash.
However, the opposite happened as the cryptocurrency's prices have continued to skyrocket in the last quarter of the year. Today, Bitcoin is climbing close to the $19,000 (£14,180) price mark.
Moas, the founder of Standpoint Research, says that the prices of Bitcoin are rising because it is already known how many Bitcoins are left to mine.
“I don’t know how much gold there is in the ground, but I know how much Bitcoin there is, and in two years there will be 300 million people in the world trying to get their hands on a few million Bitcoin,” said Moas in an interview.
This mind-boggling supply and demand imbalance is what is going to drive the price higher.
Enter Bitcoin Futures
Apart from the demand, there are many other factors that are affecting Bitcoin's price. One of the major reasons fuelling its demand is the fact that CBOE has recently launched a Bitcoin futures contract. Nadex revealed that the CME Group will also start trading futures contracts for Bitcoin, which is suitable for large, well-funded companies and not for the private investors looking to invest in the cryptocurrency.
The CME Group contract trades 5 times bigger than the price of Bitcoin, and individuals would need the help of a broker instead of trading directly on the market. The site also noted that due to “Bitcoins volatile price fluctuations, some brokers have stated that clients will need to post double the exchange listed margins of 47% to a staggering 94% value of the contract unless a client has a minimum account of $5,000,000 (£3,730,000).”
In addition to both the CBOE and CME's influence, governments around the world are also acknowledging Bitcoin as a legitimate way of paying for goods and services. Recently, the UK government was reported to be writing new laws for cryptocurrencies to prevent cases of money laundering and other illegal activities involving digital funds.
Possible Bitcoin Regulations?
Economists believe that investors will see the regulations being implemented by the UK government as an acknowledgment of the cryptocurrencies' role in the future. They assert that the regulations will further increase Bitcoin's prices because rules present credibility and generate trust.
Just like before, however, not all analysts agree with Moas' prediction.
"We think that it's risky," said the Vice President of Wealth Management at OCBC Bank Vasu Menon. "I don't see strong fundamental drivers for this Bitcoin rally,"
However, Moas firmly believes that the crypto surges are just getting started.
I look at Bitcoin the same way I look at Amazon," he said. "The way to play Amazon for the last 15 years was to buy it, hold it, and add on the dips. That's exactly the way I think people should be playing Bitcoin.
Featured Image via Fotolia
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.