Bitcoin (COIN), (OTCQX:GBTC) is not having a great week, and it looks like this sell-off may get even worse. After a failed attempt at $12K, Bitcoin entered the meltdown phase, cratering by roughly 30% in just a few days. Several simultaneous detrimental developments caused this sell-off to intensify after the failed technical attempt sparked the negative price action. However, there is one predominant factor that has become the “elephant in the room.” Bitcoin’s apparent loss of popularity could keep prices depressed for a lot longer than many people expect, and we may be looking at a near perfect storm scenario of events that could cause the current sell-off to become much worse.
The likelihood of bitcoin prices falling to $100 is greater than that of the digital currency trading at $100,000 a decade from now, Harvard University professor and economist Kenneth Rogoff said on Tuesday.
“I think bitcoin will be worth a tiny fraction of what it is now if we’re headed out 10 years from now … I would see $100 as being a lot more likely than $100,000 ten years from now,” Rogoff told CNBC’s “Squawk Box.”
“Basically, if you…
Sourced through Scoop.it from: www.businessinsider.com.au
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In their 156-page report titled “Fool’s Gold: Unearthing The World of Cryptocurrency,” the firm comprehensively stated that the current bitcoin price above $14,000 is a bubble and does not reflect the true worth of the cryptocurrency. Quinlan associates argued in their write-up that the current price is unreal for bitcoin both as a store of value and a medium of exchange.
The report read:
“As an asset, we valued Bitcoin using a cost of production approach and a store of value approach, resulting in values of $2,161 and $687 respectively. To value BTC as a currency, we estimated its utilisation for both legal, retail transaction payments, as well as payments in the black market. After significant testing, we calculated the price of BTC to be $1,780.”
Do you believe John McAfee is right about Bitcoin hitting $500,000 in 3 years? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world.
Answer by Vladimir Novakovski, 8.5 years in hedge funds, on Quora:
It’s interesting that almost all existing analysis of cryptoassets are from the point of view of fundamentals (or lack thereof). It’s often useful to look at things quantitatively instead.
So here, what we really want to understand is the probability of bitcoin reaching $500,000. There are a few ways to do that.
First, we can assume a completely random process and take a “gambler’s ruin” perspective. What is the probability that a random process will hit $500,000 before it hits $0? Given that the price as of Dec 2017 is about $15,000, we’d get $15,000/$500,000 = 3%.
Another approach is to model price as a lognormal process, which is a reasonable assumption to make for a broad set of assets. See Why do prices and income follow a log-normal distribution?
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