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However, he noted that he is “concerned” about bitcoin’s short-term prospects, suggesting that it may decline alongside traditional financial markets as the Fed begins to ease its massive monetary stimulus program.
But this may, in turn, “give a further boost to cryptocurrencies”, he added, as a “collapse” in equities would likely mean the US central bank would make more cautious moves.
If Trenchev’s prediction is correct, it means the price of bitcoin will more than double this year.
Trenchev’s past predictions
It is worth remembering that in January 2020 Trenchev predicted that the price of bitcoin would surpass $50,000 by the end of that year. “Everyone was laughing at me,” he says.
Trenchev’s prediction for 2020 was not confirmed. Bitcoin managed to reach a high of just over $29,000 that year. But the cryptocurrency eventually topped $50,000 in February 2021.
Cryptocurrency fans say the market has matured and there is plenty of liquidity now that big Wall Street institutions are flocking to digital assets.
Meanwhile, crypto “whales” – individuals who hold large digital currency holdings – such as Do Kwon, the co-founder of blockchain company Terra Labs, are buying millions of dollars worth of bitcoin in the belief that it could become a future “reserve” currency.
But there are some barriers to the market. The global regulatory environment remains fragmented and the cryptocurrency market remains unstable. In particular, bitcoin remains highly correlated to the stock market, especially the Nasdaq index. As long as stocks remain volatile, the same could happen with bitcoin.
The world’s largest cryptocurrency remains about 40% below its record price of $68,990.
The other view on bitcoin
Other crypto market executives don’t expect so much price appreciation this year.
“At this particular point in time we are living under a global uncertainty in the markets, not only in the crypto markets, but also in the stock markets,” Paolo Ardoino, chief technology officer at Bitfinex, told CNBC.
“So we’re definitely seeing lower volumes… bitcoin volumes have declined in recent weeks. So this is very important as a measurement because it shows that a lot of active players in the market, who were very active before, are staying on the sidelines for a while.”
Ardoino estimates that bitcoin could retreat sharply below $40,000, but expects the digital currency to be “well above” $50,000 by the end of the year.
“I’m bullish on bitcoin… I see so much happening in this industry and so many countries interested in adopting bitcoin that I’m really positive,” he said.
