Whilst the European region is struggling with war, uncertainty, inflation combined with Danish banks’ negative interest rates, billionaire (all depending on where the bitcoin price is at the time of writing), investor Tim Draper believes that the “mother” of all crypto currencies Bitcoin, will surge to an unprecedented all time high (you can read the full article here)
Many pundits before him, have predicted sky-high prices for Bitcoin. For example the late John McAfee and the winklewoss twins, and we’re sure Satoshi (whoever that might be) somewhere have a price in mind of his/her own. Penning is founded as direct gateway to the decentralized finance space, and while we share a different (read optimistic) view of the cryptocurrency market, here are five key market drivers which supports the predictive price claims:
1. MARKETS HAVE A NATURAL CYCLE
It is an age-old known fact of patterns that markets, be it stocks or crypto, have natural cycles. Markets are build to rise & fall. Early investors will cash out leaving later investor hanging dry until the next wave comes into play. There is only so much money to go around in the markets and only so far any asset can grow before it spills over. Even though the falls of a market can seem scary, markets are build to rise again. It’s almost human nature. Percentage wise the drop and swings of the bitcoin prices are the same, though it feels much “scarier” when it drops from $60,000 to the $20,000 price range.
2. ALMOST RECESSION RESILIENT COMPANIES
When most startups struggle to see their valuations drop, raise new rounds for survival at large discounts and find it difficult to generate enough revenue to stay afloat, especially consumer-oriented ventures, institutional investors perform better during a down-turn, looking to hedge their strategies in different asset classes like….bitcoin.
3. LARGE "PLAYERS" ENTERING THE MARKET
Penning provides a direct access platform for institutional investors, to access the DeFi & Crypto space safely, compliantly and efficiently and this thesis was proven with BlackRock joining forces with Coinbase for direct access to the space. Our belief is that this market will provide for greater liquidity opportunities which startups historically have struggled in the future, opening up opportunities for major institutional investors including VC’s to enter the space.
4. MAINSTREAM ACCESS AND ADAPTATION
Yes, Penning is making access to the space easier for institutional investors but so are many others especially those targeting the access for the masses. Krypto exchanges are starting to integrate google play & apple pay into their platforms, meaning the adaption will seriously start taking over. Mainstream not only means more users and utility for crypto currencies, but also regulatory changes supporting the growth of a modern financial industry.
5. PERFORMING ASSET
If we look at Bitcoin as single class of investment assets, it still remains one of the best-performing financial assets over the long-term. At the time of writing bitcoin is trading in $20,000’s, which was the all time high price before the big crash in 2018 where it dropped below $4,000. Even after its 2022 sell-off during the so-called crypto winter, it’s still one of the best performing financial assets over the long-term.
Bitcoin remains a risky speculative investment and there is still debates of it’s intrinsic value and predictions of where the price is headed next. Bitcoin bulls, such as Tim Draper remains convinced of positive future for the world’s preeminent cryptocurrency. Like the richest person in cryptocurrency, Sam Bankman-Fried, Penning also believes in protecting the digital asset eco-system and its current and future community members. Other juggernauts such as Binance founder Chanpeng Zhao is bullish in the bear-market (he tweeted), which indicates serious support to further enhance the industry for the better.
It is still debatable which crypto currency and asset will be the dominant utility in the modern financial industry, but as markets have previously proven, cycles are healthy for industry “cleanse” and necessary for future redemption, stability and sustainability.