🌋 Bitcoin to Reach $200,000: When to Lock in Profits?
posted 18 Nov 2024
Crypto analyst Dhaval Joshi of BCA Research questions whether Bitcoin investors should lock in profits now as its price approaches $100,000.
The decision, he explains, largely depends on whether you're a short-term trader or a long-term holder.
Joshi highlights Bitcoin's characteristic price patterns, which alternate between growth spurts and temporary pullbacks. After the recent rally—spurred by President Donald Trump’s pro-crypto stance—he predicts a possible short-term correction, similar to what occurred in April.
However, Joshi maintains that Bitcoin's long-term upward trajectory remains intact. He forecasts that the cryptocurrency could surpass $200,000 during this market cycle.
BTC always takes one step back after two steps forward. Source: zerohedge
Why Are Bitcoin and Gold So Valuable?
To grasp Bitcoin’s value, Joshi suggests understanding the fundamentals of gold. While gold is prized for its physical attributes, such as scarcity and chemical durability, its primary appeal lies in its "confiscation resistance."
Unlike fiat currencies, which are vulnerable to inflation or government seizure, gold and Bitcoin serve as protected assets. This makes them particularly desirable during economic instability, when safeguarding wealth becomes a priority.
The Network Effect and Bitcoin's Future
The value of both gold and Bitcoin is underpinned by the “network effect”—a phenomenon where the more people believe in an asset's value, the stronger that value becomes. This growing belief in the resilience of Bitcoin and gold against inflation exemplifies the network effect in action.
Analyzing historical data, Dhaval Joshi concludes that while gold has experienced temporary corrections, its long-term trend has remained positive. The same principle applies to Bitcoin: despite its inherent price volatility, investors can rely on its overarching upward trajectory.
Massive historical gold price drops didn’t diminish its core value. Source: zerohedge
Joshi's perspective aligns closely with that of Matthew Sigel, Head of Digital Asset Research at VanEck. During a CNBC interview, Sigel suggested that Bitcoin's upward momentum could extend through 2025. He noted that Trump’s reelection has triggered a price movement reminiscent of the post-election rally seen after Biden's victory in 2020. According to Sigel, Bitcoin could hit $180,000 in this market cycle.
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