World over there is a renewed enthusiasm to buy cryptocurrencies amid growing valuation. This is further boosted by wide acceptance of blockchain technology in financial sector and regulatory acceptance of the technology in fintech space and other areas.
In October after hitting all-time high, analysts are hopeful that Ethereum and Bitcoin will double in value before the end of the year.
The analyst behind Plan B, correctly predicted the price of Bitcoin in September and came very close in October. The analyst believes that Bitcoin will reach $98,000 this month itself and go on to breach $135,000 in December.
This is in-line with other price predictions for Bitcoin that banking on the world’s oldest cryptocurrency. Standard Chartered, for instance, pegs that Bitcoin will hit $100,000 in 2021 or early 2022.
Meanwhile, global investment bank, Goldman Sachs, estimates that Ethereum’s price is set to reach $8,000 by year-end – higher than what a recent panel of 50 cryptocurrency experts, put together by Finder, predicted at $5,000.
The money from investors is pouring in after the first ever Bitcoin-based exchange traded fund (ETF) hit the New York Stock Exchange (NYSE). As per news report, crypto investment products saw inflows of $288 million for the week ending on October 31 – Bitcoin accounted for 93% of it at $269 million.
Bitcoin is up by 112% this year so far and hit the all-time high of $67,000 in October. The analysts are hoping that the cryptocurrency will rise further with more ETFs coming in which will give a boost to Bitcoin’s legitimacy at least as an investment asset, not an actual medium of exchange.
Goldman Sachs’ prediction for Ethereum to breach $8,000 is based on the second-largest cryptocurrency’s historical correlation to inflation. According to the banking behemoth, cryptocurrencies have traded in-line with inflation breaks – the difference between the yield of a nominal bond and an inflation-linked bond of the same maturity – since 2019.
“It has tracked inflation markets particularly closely, likely reflecting the pro-cyclical nature as a ‘network based’ asset. And the lastest spike in inflation breakevens suggests upside risk if the leading relationship of recent episodes was to hold (grey circles),” said the note.
According to an analysis by blockchain data firm Kaiko, Ethereum has offered higher returns than Bitcoin with respect to market risk over the past one year. As compared to this time last year, the cryptocurrency’s price is up by 1,000% – leaving not just Bitcoin, but other major cryptocurrencies, in the dust.
