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

Published 05/28/2021, 03:55 PM
Updated 05/29/2021, 07:00 AM
© Reuters.

© 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.

Latest comments

$100K BTC/USD is almost inevitable. Question of when.
smh forecasting what crypto will do or should do
Did he pay for that commercial?
Don't cry just because you missed out sweetie
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.
you sound uneducated and will always be one step behind
you will always be one step behind
it's not 1820 anymore
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?
you're still here , aren't you??
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
buy gold
Cryptos are done...
Gold and Bitcoin are zero related. Gold moves in relation to interest rate and dollar index = real rate.
cryptos are dead money
Bitcoin had a halfing episode the past month...
My target is just 100
Could be high?
Can anyone guide investing crypto currency which one is best
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.
They all have the same real value: $0,00
currently BTC has a very high risk so it needs careful calculations in making investment decisions
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?
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.
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.
even though prices are up 4% and you got a 0% raise ~ relaax..it's "transitory"
Exactly right
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.
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.
Whay a dummy article , pure speculation
what's next is terawatt solar powered cryptocurrency mining ?
Useless advertisment
Article was now coreected, good son…
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. ..
that's not bitcoin's fault, there should be more renewable energy sources built if it's such a big problem
silly paid advertising...to support a worthless Ponzi scheme
"...a worthless Ponzi scheme."? Where does it even MENTION Social Security?
What, banks don't use energy?
Lol instutuons caught up in FOMO are selling huh? Pretty sure thats FUD dude.
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