Bitcoin‘s value has began to rise again after a chaotic last couple of weeks. The cryptocurrency was valued at Â£25,000 on January 5 before rising to a price of Â£30,000 on January 7. But following this, it endured its worst decline since March last year, losing around 20 percent of its value in just two days. The drop may have deterred many, as volatile price swings leave investors unsure about the long term profitability of the cryptocurrency.
However, a former Goldman-Sachs hedge fund chief claimed that Bitcoin will reach a value of $1million (Â£738,000) in the long term â€“ suggesting that there could still be profit to be made for investors.
Raoul Pal, who has allocated more than 50 percent of his capital to Bitcoin, argued that prices could breach the million mark in five years.
He added that many institutional funds will adopt the digital currency as the economy will take a long time to recover from the coronavirus pandemic.
He told Stansberry Research in October: “Just from what I know from all of the institutions, all of the people I speak to, there is an enormous wall of money coming into this.
“It’s an enormous wall of money â€” just the pipes aren’t there to allow people to do it yet, and that’s coming. But it’s on everybody’s radar screen, and there’s a lot of smart people working on it.”
He continued: “The economy’s not going to recover for a lot longer than we expect.
“There’s no stimulus around, and we’ve got more problems to come in Europe, the US, and elsewhere. And businesses don’t have enough cash flow.
“They’re closing in droves. And that’s what I called the insolvency phase.”
Mr Pal claimed that his significant investment in Bitcoin could expose him to a big downward dip in profits, but argued the potential upside is “much bigger”.
He explained: “My trading positions are relatively small, because I don’t think there’s as much opportunity as there is in Bitcoin. So really, mainly, a bit of cash, some gold, and Bitcoin.
“And I’m even toying with the idea of selling my gold to buy bitcoin, more Bitcoin.”
Morgan Creek Digital co-founder Anthony Pompliano predicted that by the end of 2021, the cryptocurrency would hold a value of $100,000 (Â£73,000).
He detailed his prediction, made in August 2019, to CNN’s Julia Chatterley.
He said: â€œWhenever we get to a recessive period or kind of slowing growth, central banks have kind of two tools.
Bitcoin ‘will reach Â£73,000 value by end of 2021’ in startling claimÂ [INSIGHT]
Bitcoin uproar as investors warned of ‘rapid collapse’ in valueÂ [ANALYSIS]
Martin Lewis’ Bitcoin warning revealed: ‘You could lose everything!’Â [INSIGHT]
“And so, when they do both of those things, it usually takes anywhere between six to 18 months to feel the effect of those tools, and what itâ€™s going to do is itâ€™s going to coincide with the Bitcoin halving.”
Britainâ€™s Financial Conduct Authority (FCA) warned investors of the risks that come with bitcoin following last week’s slump.
They said: â€œIf consumers invest, they should be prepared to lose all their money.
“Some investments advertising high returns from crypto assets may not be subject to regulation beyond anti-money laundering.
â€œSignificant price volatility, combined with the difficulties valuing [Bitcoin] reliably, place consumers at a high risk of losses.â€�
Express.co.uk does not give financial advice. The journalists who worked on this article do not own Bitcoin.
The post Bitcoin ‘will surge to value of $1million’ as expert predicts ‘enormous money’ | City & Business | Finance appeared first on TechFans.