Following Monday’s news that Tesla had purchased $1.5 billion in Bitcoin earlier this year, Bitcoin hit a new all-time high on February 8th. The all-time high was surpassed once again on Tuesday, February 9th when Bitcoin hit $48,003.72. Currently, Bitcoin hovers around $45,000.
The cryptocurrency market is, for good reason, quite happy about these new achievements for the cryptocurrency that, just a few years ago, was ridiculed by most in the established financial institutions. Not only are the financial gains positive but also the fact that Tesla has decided to integrate Bitcoin payment into their business marks the first major company making the step towards cryptocurrency adoption. Many within the crypto market are also predicting that many companies will follow Tesla’s example over the course of the next year. The usual nay-sayers have once again voiced their thoughts. In a note, Nikolaos Panigirtzoglou, a managing director at JP-Morgan London stated that Tesla’s adoption of Bitcoin was, “unlikely to be followed by more mainstream corporates.” He added that “the main issue with the idea that mainstream corporate treasurers will follow the example of Tesla is the volatility of Bitcoin.”
Though Bitcoin’s price volatility is certainly a current problem in the adoption and purchase of Bitcoin by companies, this is an issue directly aligned with the further adoption of Bitcoin by the general public and large corporations. It is truly a chicken and egg situation. As more companies offer the possibility of purchase with Bitcoin, more consumers will learn about and adopt the cryptocurrency leading to stability resembling fiat currencies around the globe.
Though Panigirtzoglou did have pessimistic views with regards to corporate adoption of Bitcoin shortly, he also wrote in another note that the long term price valuation of Bitcoin would realistically reach $146,000 per token. His statement reads:
“Crowding out of gold as an ‘alternative’ currency implies a big upside for Bitcoin over the long term. However, convergence in volatilities between Bitcoin and gold is unlikely to happen quickly and is in our mind a multiyear process. This implies that the above-$146,000 theoretical Bitcoin price target should be considered as a long-term target, and thus an unsustainable price target for this year.”
Though we may not agree with Panigirtzoglou regarding adoption, we do foresee the value of Bitcoin crossing the $100K threshold, much sooner than some in the financial market would predict!
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