It was only a matter of time. It’s now done, Bitcoin is over $ 50,000 . The rest of the complex follows, many cryptos have broken their 2017 record. Notably Ethereum , which is expected to hit $ 2,000 soon. Anything going up before going down, when are we going to have a correction? How big will it be? He who says he knows is very presumptuous!
A bull market fueled by institutions
If 2017 was a bull market purely propelled by individuals and whales, that of 2021 is radically different. This time around, institutional investors and companies like MicroStrategy and Tesla are driving the rise. Not only does this mean a lot more firepower. But also an optimism which is contagious .
The involvement of large financial institutions encourages individuals not to sell. Almost every day, new heavy goods vehicles are purchasing or notifying their intention to do so soon. As recently as this week, MicroStrategy announced an additional $ 1 billion subscription to buy Bitcoin . BlackRock has also said it has a keen interest in cryptos. In such a context, it is difficult to envisage a correction such as that of 2018.
Bubbles in the alts
Personally, I don’t see a bubble in Bitcoin. Things could change if the rise continues. In the absence of a coordinated campaign from the authorities, it is not crazy to anticipate a BTC at $ 75,000-100,000 by the end of the year. On the other hand, the valuation of the alts is more than questionable . Basically nothing has changed for many cryptocurrencies. Cardano , for example, remains a theoretical project that has everything to prove, but it weighs in at $ 30 billion. For example, this is 3 times more than the Kirkland Lake Gold mining company, which recorded a net profit of $ 400 million in 2020.
Historically, alts corrections start with a Bitcoin correction . In the absence of decorrelation, which would be a first, these overheating alts could continue their ascent despite everything.
What is the price of Bitcoin that will sound the alarm bells?
At the end of Trump’s tenure, there was talk of introducing a rule to identify owners of private wallets. In the end, this did not happen. Joe Biden has since taken over the United States. We can imagine that his administration is thinking about the crypto file . At the rate things are going, it is hard to imagine that the subject does not concern the Fed and the US Treasury. Will she adopt a conciliatory or hostile attitude? Are they coping with the almost complete mutation of Bitcoin as a store of value? We still don’t know. This is probably the key to the ongoing bull market. And unless you have your entry into the White House, it’s impossible to predict what will happen in the months to come.