Wall Street Reaffirms Bitcoin Surging to $25K, Despite China Ban
Following China’s outright ban on bitcoin, and a huge price drop, bitcoin surging and analyst reaffirms $25k prediction.
Even in the wake of the Chinese government’s nationwide ban on bitcoin, Wall Street analyst Thomas Lee, co-founder of Fundstrat Global Advisors, reaffirmed bitcoin surging to $25,000 price target.
Along with several other prominent financial analysts, Lee predicts bitcoin surging to $25,000 in the short-term. On CNBC’s program Fast Money, Lee explained
“There are only about 300,000 holders of at least $5,000 of bitcoin. That is like saying the iPhone was a bubble in 2007 four days into the sale because there were 500,000 iPhones sold. Bitcoin is a protocol. Meaning, the actual network itself is generating the value so that the Visa of bitcoin is not going to be as valuable as the blockchain network itself. And that is why, for instance, to make a fraudulent transaction on bitcoin today, it would cost almost $30 billion to create one fake bitcoin.”
Lee went further, explaining that mainstream adoption of bitcoin (and other cryptocurrencies) are deemed as threats to major financial institutions, as the decentralized nature of bitcoin would prove third party service providers – such as banks – redundant. Many ensure that within this fact lies the main motivator for governments to restrict the use of these cryptocurrencies.
China’s central bank, the People’s Bank of China, placed a complete ban on initial coin offerings (ICOs) and bitcoin exchanges operating within China. The announcement led to a decrease in bitcoin pricing, as China accounted for between around 10 to 13% of the global bitcoin market. Even after the finalization of the ban, bitcoin prices rebounded quickly, thanks to market confidence in other sectors.
Analysts such as Lee aren’t worried about bitcoin’s future. On Fast Money, Lee stated that the growing demand from institutional investors and professional traders will only increase, bringing bitcoin price to new highs.
Support from major financial institutions also provided a solid foundation for bitcoin growth. The Chicago Board Options Exchange (CBOE), the largest options exchange in the US, has established a strategic partnership with regulated bitcoin exchange Gemini to provide an infrastructure for institutional and retail traders. Such partnerships, along with the scaling solution provided by Segregated Witness (SegWit), have set the trail towards mainstream adoption of the once esoteric cryptocurrency.
Tyler Winklevoss, the co-founder and CEO of Gemini, spoke on behalf of the new partnership. “Gemini’s key concerns in the cryptocurrency ecosystem have always been security, compliance, and regulatory oversight. By working with the team at CBOE, we are helping to make bitcoin and other cryptocurrencies increasingly accessible to both retail and institutional investors.”
Read more about the impact of China’s ban on a recent conference.