Bitcoin Bulls & Bears: Winter 2021 Edition

This list was initially compiled in May 2020 utilizing Kmart’s online store directory and then doing research through various news reports, phone calls to stores and message boards to verify the number of stores remaining open. We stand by the accuracy of this list recently cited in Forbes.

It’s been quite a month so far (January 2021) for Bitcoin (BTC). As of publishing, we have been able to surpass a $40,000 price for BTC. Speculation is all over the place where things could go next. While we all are in our own unique situations, here are some of the questions you might be asking yourself:

BTC price chart from August 2020 – January 10, 2021 from Yahoo! Finance
  1. If you hold, you might be asking, should I buy more or consider selling?
  2. If you don’t have any, is now the time to buy as it continues to surge?
  3. Is this the peak and should we all be selling or holding off further purchases?

If I knew the answers, I would be glad to tell you but unfortunately, I don’t. So for today, I’ve compiled a couple of bear takes and bull takes to help guide you on your journey.

The Bulls:

A recent piece in Forbes quotes a blog post from Ethereum co-founder Vitalik Buterin saying: “One of the more underrated bull cases for cryptocurrency that I have always believed is simply the fact that gold is lame, the younger generations realize that it’s lame, and that $9 trillion has to go somewhere.” Certainly, this is an interesting take that suggests upward momentum at the hands of youth.

Additionally, this recent bull run has confirmed a prediction of Cameron Winklevoss, known as one of the twins depicted in the 2010 film The Social Network. In 2013, Winklevoss predicted bitcoin, then trading at $900 per coin, could reach $40,000. It has now met the mark. Additionally, co-founder of Heisenberg Capital Max Keiser correctly predicted bitcoin would end 2020 at $28,000. He’s now projecting it could reach $220,000 by the end of 2021. Quite a bull take.

In a piece for Real Money, James “Rev Shark” DePorre notes the potential wave that could come as institutions recognize the trend of bitcoin best summarized in the below:

The bull case is based in part on bitcoin as an alternative to gold, which has always been seen as an appropriate hedge against various economic disasters.

According to J.P. Morgan, bitcoin’s market capitalization of around $575 billion would have to rise by 4.6 times to match the total private sector investment in physical gold and ETFs. At that price, bitcoin would be valued around $146,000. This only happens if bitcoin starts to trade more closely in tandem with gold, which attracts more institutional investment.

In an interview on Bloomberg TV, Guggenheim Partners Chief Investment Officer Scott Minerd said his firm’s fundamental analysis shows bitcoin should be worth $400,000. That price target is based on two things: the asset’s scarcity and its relative value to gold as a percentage of gross domestic product.

Finally, a piece in Bitcoin Magazine lays out a lengthy $100,000 case for bitcoin in the year 2021.

The Bears

As Bitcoin mania continues and proves many of the bulls right, at least in the short term, there’s a large share of continual naysayers. One notable piece comes from Anton Wahlman at Seeking Alpha, he offers the below take on bitcoin in comparison to gold:

Once people realize that a Bitcoin is worth less than a tulip, less than fresh air in a can, I believe its price will fall to its intrinsic value: $0. How long until that happens, and where will the Bitcoin price go between now and then? I have no idea. If something that’s inherently worth $0 could do something so insane as to go to $20,000 in the first place, it could go a lot higher before it hits $0. And it could take years.

It may not be possible to short Bitcoin simply because its eventual fall to $0 could happen in an instant, and be essentially impossible to time. It could happen for any number of reasons, but unless you are very certain about the timing of the specific catalyst that will set Bitcoin down by a huge percentage, you could get burned a lot more while waiting for that to happen.

As for gold, I expect its price in future years to reflect the increase in the quantity of government paper money. If the U.S. government – the Federal Reserve – increases the quantity of money by 10% per year, I expect the gold price to also average 10% per year increases. There should be no mystery there. Gold is a real thing, unlike Bitcoin or other cryptocurrencies.

Anton Wahlman, Seeking Alpha

In addition, a recent survey of crypto investors, by Genesis Mining reported by Coin Telegraph, found that 50.1% of respondents estimated that BTC will be worth $20,000 or less by 2030, one-third predicted the price will be $10,000 or less, and 11.8% forecasted prices below $1,001. Some of this logic stems from fear of added crypto governing regulations and outright bans from certain countries.

Takeaways

To be frank, it’s hard to find many bear cases for bitcoin as it becomes more mainstream. An observation of the patterns over the last decade makes one feel, sometimes, like there’s nowhere left to go but up. As someone who lived in the 2017 boom, this time truly feels different. The mainstream momentum coming from the surreal changes such as PayPal allowing you to buy and sell crypto on their service and large institutions really taking a serious look makes it hard to imagine a major correction coming any time soon.

That said, the drop after the 2017 bull run came hard and fast and in a devastating way. Many, including me, were buying at the absolute top of the peak when it all came crashing down. Read lots, think long and hard, and remember, it’s your money. Invest wisely.

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