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Bitcoin Swings Again, But Blockchain Boom Keeps 100K Target Alive

CryptocurrencyMay 29, 2021 07:00AM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The wild swings in bitcoin continued Friday, but business activity on the blockchain has never been better, and will eventually help part the clouds of fear, uncertainty, and doubt, propelling the popular crypto to $100,000 by year-end.

BTC/USD fell 6%, to $36,115.

“I expect to see $100,000 this year … we should be close to that level already based on the halving cyclical, but we're not there because there's confusing narratives [including regulation] that haven't shown up yet.” Michael Venuto, chief investment officer for Toroso Investments said in an interview Thursday with Investing.com.

"The recent price action in BTC will calm down because the business part of this, the part where, bitcoin, other cryptocurrencies and decentralized finance are being used to revolutionise finance is in a better shape than it's ever been in history," Venuto added.

A halving event - that halves the reward for mining Bitcoin transactions and the supply of newly minted bitcoin – occurs roughly every four years to keep a lid on inflation. Halving events in both 2012, and 2016 had preceded previous bull runs for BTC.  

The most recent halving event in May last year, cut the block reward for mining bitcoin from 12.5 BTC to 6.25 BTC, and helped bring the supply and demand narrative into focus. A quick look at where we are in the current cycle suggests there is plenty of room for bitcoin to run higher.

"Based on the halving cycle, supply and demand, and the retail sentiment, I don't think we're anywhere close to the end of the bull run,” Venuto said.

During the recent selloff, the smaller, novice investor on a trading diet of leverage and greed was widely signaled out for panic selling, adding fuel to the downside. But the hedge funds and institutions, trading on leverage, may have been caught up in FOMO fever, and ultimately also fell victim to the margin squeeze.

Regulation, or the lack thereof, may have something to do the with the bearish institutional bets.

The dearth of options available to institutions to buy and hold bitcoin in an investment vehicle that fits their world, gives “more access and ability for traditional finance to short bitcoin than they have to be buy and hold investors,” Venuto said.

Unlike retail investors, institutions are typically not permitted to directly buy bitcoin on crypto exchanges, or hold it in a wallet.

Many have touted a bitcoin ETF in the U.S. as a solution to plug the gap. But it’s unlikely to come anytime soon even with an SEC chairman who has a strong grasp of blockchain technologies.

“[W]e're in a world where the laws that govern how we treat financial instruments were written in 1940 and 1933,” Venuto said. “The U.S. government needs to make a much bigger statement about what Bitcoin is to them and whether it should or shouldn’t be subject to these securities laws.”

Concerns about the environmental impact of mining BTC has also played a role in souring institutional sentiment on bitcoin. A narrative that was given credence in the wake of remarks by Tesla (NASDAQ:TSLA) chief executive Elon Musk in recent weeks.

“It was precipitated by the ESG movement and this notion, which was exacerbated by Elon Musk, that there are some real environmental problems with the mining of bitcoin,” ARK Investment Management founder Cathie Wood said Thursday at CoinDesk’s Consensus 2021 conference.

But the notion that bitcoin is a dirty crypto – given the energy used up to mine blocks on the blockchain - is somewhat of misnomer at least in the U.S. as most “American miners use clean renewable energy,” Venuto said.

Bitcoin Swings Again, But Blockchain Boom Keeps 100K Target Alive
 

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Comments (38)
Stephen Fa
Stephen Fa May 30, 2021 2:41PM ET
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$100K BTC/USD is almost inevitable. Question of when.
Ariel Tamez
Ariel Tamez May 29, 2021 4:25PM ET
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smh forecasting what crypto will do or should do
Chris Johnson
Chris Johnson May 29, 2021 11:33AM ET
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Did he pay for that commercial?
Samui Lo
Samui Lo May 29, 2021 11:33AM ET
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Don't cry just because you missed out sweetie
ZS Beck
ZS Beck May 29, 2021 11:26AM ET
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Gold is money, it’s always been and it always will be. Bitcrap and any other coin *******will never replace it. If you made money on this coin hype, time to get out.
Ju Da
Ju Da May 29, 2021 11:26AM ET
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you sound uneducated.
Ju Da
Ju Da May 29, 2021 11:26AM ET
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you sound uneducated and will always be one step behind
Ju Da
Ju Da May 29, 2021 11:26AM ET
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you will always be one step behind
Nahid Joy
Nahid Joy May 29, 2021 11:26AM ET
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it's not 1820 anymore
Miriam Morkhul
Miriam Morkhul May 29, 2021 10:50AM ET
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Well, with the derivative insider ****why not put Bitcoin at 300 000 usd? Or a million dollars per coin? I mean what is the fundamental value that will drive it to 100k?
Prince ime Efyoung
Prince ime Efyoung May 29, 2021 10:50AM ET
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you're still here , aren't you??
William Bailey
William Bailey May 29, 2021 10:29AM ET
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Pyramid chicken!Cryptos are good one thing only.... eating up excessive liquidity !!! Oh, a few gamblers will escape with some cash , but the trillions in losses are mounting and the damage to the overall markets is substantial!!! Corona virus aid will wear off and thanks to cryptos faster than we expect! The Fed’s 120 b in credit creation is like pissing on a forrest fire
danny Levine
danny Levine May 29, 2021 10:14AM ET
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buy gold
Connecticut Yankee
A_Jaundiced_Eye May 29, 2021 10:14AM ET
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Yes, but Gold won't have a large move up until the cryptos are done.  Right now, best to slowly accumulate the yellow metal waiting for the big move up next year.
Jan Buyle
Jan Buyle May 29, 2021 10:14AM ET
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Connecticut Yankee Cryptos are done...
Miriam Morkhul
Miriam Morkhul May 29, 2021 10:14AM ET
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Gold and Bitcoin are zero related. Gold moves in relation to interest rate and dollar index = real rate.
Josh Harvey
Josh Harvey May 29, 2021 10:14AM ET
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Connecticut Yankee cryptos are dead money
Kevin Shaughnessy
Kevin Shaughnessy May 29, 2021 9:11AM ET
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Bitcoin had a halfing episode the past month...
neang aee 냥에
neang aee 냥에 May 29, 2021 9:06AM ET
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My target is just 100
Kevin Shaughnessy
Kevin Shaughnessy May 29, 2021 9:06AM ET
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Could be high?
Asif Memon
Asif Memon May 29, 2021 8:03AM ET
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Can anyone guide investing crypto currency which one is best
Henrison Lumbanraja
Henrison Lumbanraja May 29, 2021 8:03AM ET
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Currently, many analyzes and predictions using various theories and statistical analyzes are almost entirely wrong because of the high uncertainty that is influenced by negative information and country regulations and the existence of negative issues regarding crypto so now it is better to use your heart and feeling like playing casino.
Jan Buyle
Jan Buyle May 29, 2021 8:03AM ET
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They all have the same real value: $0,00
Henrison Lumbanraja
Henrison Lumbanraja May 29, 2021 7:40AM ET
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currently BTC has a very high risk so it needs careful calculations in making investment decisions
Henry Anderson
Henry Anderson May 29, 2021 3:50AM ET
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Bitcoin is a Ponzi scheme, but it is a government-backed Ponzi scheme. Why else would the mainstream media always portray Bitcoin as actual Gold Coins?
Henry Anderson
Henry Anderson May 29, 2021 3:40AM ET
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The United States and Tesla (Elon Musk) are indirectly promoting Bitcoin. Elon gets away with obvious pump-and-dump schemes involving TV Shows and Twitter while the SEC forced Michael Burry to delete his Twitter account. Joe Biden talks all day about green energy, but the American government doesn't even try to regulate or ban cryptocurrencies despite their environmental concerns. In other words, Elon Musk and the American Government seem to be cooperating to promote Bitcoin to prevent the Fall of the US dollar. They are advocating Bitcoin because rising Gold, Euro, and Pound will threaten the reserve currency status of the US Dollar. (Most of Bitcoin is traded in USD, whereas Dollar recently lost to Euro as Payment Currency-SWIFT) Strangely, Elon is the Richest Man in the world, although all of his companies are not profitable. He could not have done it without the help of the American government.
Miriam Morkhul
Miriam Morkhul May 29, 2021 3:40AM ET
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Check out Nancy Pelosi options trading on Tesla. Knew well before everyone else that Tesla would survive thanks to government backing. I think it was Business Insider who wrote an article about the companys worrying junk bonds on it's book. This was when Tesla was shorted and started falling below 200usd. The US Mint says there is silver shortage, backlogged on their minting because of it. High demand. At least some people remember what real money is.
Jon Bal
Jon Bal May 28, 2021 11:24PM ET
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even though prices are up 4% and you got a 0% raise ~ relaax..it's "transitory"
Charles Barnes
Charles Barnes May 28, 2021 9:44PM ET
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Exactly right
Eric Vasbinder
dark77star May 28, 2021 9:42PM ET
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Clean, renewable energy that could be going to power homes, electric cars, etc and helping keep rates down. Proof of work was great for a decade ago, but proof of stake is a much more eco friendly option for this decade and beyond.
Eric Vasbinder
dark77star May 28, 2021 9:42PM ET
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Clean, renewable energy that could be going to power homes, electric cars, etc and helping keep rates down. Proof of work was great for a decade ago, but proof of stake is a much more eco friendly option for this decade and beyond.
Patrick Brisebois
Patrick Brisebois May 28, 2021 9:06PM ET
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Whay a dummy article , pure speculation
Anita Yellow
Anita Yellow May 28, 2021 9:06PM ET
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what's next is terawatt solar powered cryptocurrency mining ?
Firas Watad
Firas Watad May 28, 2021 8:22PM ET
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Useless advertisment
Mesage Casket
Mesage Casket May 28, 2021 8:21PM ET
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Article was now coreected, good son…
la popeye
la popeye May 28, 2021 6:46PM ET
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American miners use clean renewable energy,” Venuto said.....liar! bitcoin is as dirty as coal. Should be banned as nothing polluting the planet. This is the real bitcoin. don t play the game with bitcoin. or just throw oil in your prefered river. ..
Xynorex Xynorex
Xynorex Xynorex May 28, 2021 6:46PM ET
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that's not bitcoin's fault, there should be more renewable energy sources built if it's such a big problem
Ricardo Diogo
Rcd72 May 28, 2021 6:39PM ET
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silly paid advertising...to support a worthless Ponzi scheme
Connecticut Yankee
A_Jaundiced_Eye May 28, 2021 6:39PM ET
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"...a worthless Ponzi scheme."? Where does it even MENTION Social Security?
John Romanoff
John Romanoff May 28, 2021 5:59PM ET
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What, banks don't use energy?
Dave Gwizdalski
Dave Gwizdalski May 28, 2021 5:43PM ET
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Lol instutuons caught up in FOMO are selling huh? Pretty sure thats FUD dude.
 
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