The price of bitcoin struggles to stay above $6,000. Condolences if you bought at $20,000.
With concern mounting over where the leading cryptocurrency will find its ‘bottom’ price, one analyst has hit back, saying, “Bitcoin valuation framework cautiously points towards possible valuation support.”
Now that we’re at the halfway point of the year, Canaccord’s analyst Michael Graham provides an update to his 2018 bitcoin outlook note.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, Graham has a yearly average return of 20.4% and a 65.5% success rate. Graham is ranked #56 out of 4822 analysts.
Graham wrote, “If we are to believe that the use of bitcoin to purchase drugs caused the 2013 bubble and the use of bitcoin to purchase altcoins caused the 2017 bubble, store-of-value applications may or may not be enough to push bitcoin higher without more robust payments use cases. Either way, simply relying on pattern recognition (we acknowledge this is a non-fundamental approach!) suggests that bitcoin may not bottom until March 2019, and may not recover to previous highs before March 2021.”
“Bitcoin has returned to becoming a low-cost solution of transferring value over the internet, as its fee per transaction has fallen to $0.93 currently, down from all-time highs of ~$53 in late-December 2017. Although some of the decrease in bitcoin’s transaction fee can be attributed simply to the recent decrease in volume on the bitcoin network as compared to during the mania in late-2017/early-2018 that saw BTC soar to near $20,000, the greater point to be made is that bitcoin’s blockchain is stronger today than ever before,” the analyst added.
Looking ahead, the number of Lightning nodes, percentage of SegWit transactions and the fees per transaction will continue to be key metrics to track the progress of bitcoin as it seeks to one day potentially be a form of universal currency as envisioned by several well-known technology luminaries.