Bitcoin, the largest digital currency by market capitalization, perked up a bit Friday to traverse the $6,500 level. Some market observers believe bitcoin can rally into the end of the year, but there is a price area where that rally could fizzle.
“There should be a steady recovery in the number of unique users as well as transaction volumes on the Bitcoin network over coming months – helping Bitcoin prices reach around $8,500 by the end of the year,” according to Trefis.
Last week, bitcoin prices slumped amid news that Goldman Sachs is cooling on digital currencies. Bitcoin was stung last week by news that Goldman Sachs is on the verge of scrapping its plans to have a digital currency trading desk. The ebbs and flows of Bitcoin’s price have been dependent upon news of institutional trading firms like Goldman Sachs and BlackRock getting involved in cryptocurrencies.
Focusing On Fundamentals
Much attention is paid to cryptocurrencies on a technical basis, but fundamentals should not be overlooked.
Among the myriad issues facing bitcoin and other cryptocurrencies is adoption. As in when cryptos will become more widely accepted and used for mainstream activities, such as basic payments and money transfers, on a larger scale.
“We expect the number of users on the Bitcoin network to continue to grow steadily over the coming months, which is why we believe the Bitcoin price will jump more than 30% over the next three months to reach $8,500,” according to Trefis. “While this figure pales in comparison to the high it reached last year, and is also well below the $10,000-level seen in May, it should be noted that the SEC is still reviewing proposals for a few Bitcoin ETFs.”
For more information on the cryptocurrency market, visit the Bitcoin category.