This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.

Bitcoin’s Rise Is Luring Everyone from Goldman Sachs to Chipotle, but a Crash Might Be Coming

Kraken’s CEO believed a Bitcoin will most likely be worth a Bugatti by 2023 while some analysts say the crypto market will lose steam.

Coinbase is on the verge of going public, Goldman Sachs is going to offer Bitcoin investments, and Chipotle even got in on the action by giving away $100,000 worth of the cryptocurrency to celebrate National Burrito Day.

Suffice to say, Bitcoin has come a long way toward becoming mainstream. The value of the cryptocurrency has also been on a tear, continually climbing to new heights over the past year, after an initial crash at the onset of the coronavirus pandemic. Much buzz is surrounding expectations that we are only at the beginning of the rally, and that values are set to soar much, much higher in the near future.

Speaking on Bloomberg TV on Wednesday, Jesse Powell, the founder and CEO of cryptocurrency exchange Kraken, illustrated his outlook for Bitcoin prices by comparing them to the cost of luxury cars.

“It might be easier to understand if we measure it in terms of Teslas,” he said, noting that at current price, one Bitcoin is about $58,700, or roughly in the ballpark of a Tesla.

“Probably by the end of the year it will be one Bitcoin per Lambo [Lamborghini], and probably by the end of next year it will be one Bitcoin per Bugatti.”

This trajectory would require nothing short of sustained rocket power. A Lamborghini has a starting price of around $200,000. A lower-tier Bugatti costs about 15 times that much at around $3 million.

The surge in Bitcoin, along with recent increases in other cryptocurrencies such as Ether and Binance Coin have come as the crypto world makes some major strides into traditional financial markets.

San Francisco-based Coinbase, the world’s most valuable cryptocurrency exchange at $68 billion, is preparing to go public in mid-April through a direct listing on the NASDAQ, where it is expected to trade under the ticker COIN. Kraken may not be far behind. Powell told Bloomberg the company is aiming to go public next year.

Coinbase Facebook followers

Meanwhile, Goldman Sachs, one of the world’s most prestigious financial firms, is going to begin offering private wealth management clients exposure to Bitcoin and other digital assets starting later this year, CNBC reported yesterday. By doing so, Goldman will be following in step with peer Morgan Stanley, which told financial advisors they could put clients in Bitcoin funds starting this month.

Shockingly, just a bit less than four years ago, the finance world had a dramatically dimmer view of cryptocurrency’s prospects. In September 2017, JPMorgan CEO Jamie Dimon proclaimed that trading in Bitcoin was “stupid” and that cryptocurrency was only useful “if you were in Venezuela or Ecuador or North Korea or parts like that, or if you were a drug dealer” or “a murderer.”

Since then, the bank has done an about-face, has been researching the impact of digital assets on traditional finance, and has made plans to offer investment clients access to a cryptocurrency-linked debt instrument.

Further cementing Bitcoin’s staying power was Tesla’s $1.5 billion investment in the cryptocurrency, the company’s plan to accept it as payment for cars, and CEO Elon Musk’s boosterism of digital assets on Twitter and other social media platforms. PayPal has also said it would soon allow U.S. customers to buy items with crypto, CME Group announced an impending rollout of micro Bitcoin futures and Visa said it would launch a pilot program to test settling transactions using “stablecoin.”

Coinbase daily page views per million (average)

With so many stars aligning in Bitcoin’s favor, it’s not surprising that many analysts and crypto entrepreneurs would be speculating that the sky is the limit in terms of future value, including some technical analysts who say chart patterns indicate an impending surge beyond $70,000. But as usual, not everyone is quite ready to jump into the herd with the bulls.

Bobby Lee, co-founder and former CEO of crypto exchange BTCC, recently told CNBC that Bitcoin’s rally could push it as high as $300,000 — but that values are likely to plunge and remain stagnant for a prolonged “Bitcoin winter” after investors get burned.

A cryptocurrency strategist meanwhile warned the network that Bitcoin prices are near an “intermediate” peak and overdue for a correction, which could be facilitated by the launch of CME Group’s mini futures.

“The whole rally in crypto is getting very long in the tooth,” Boris Schlossberg, managing director of FX strategy for BK Asset Management, told CNBC.

About the Data:

Thinknum tracks companies using the information they post online, jobs, social and web traffic, product sales, and app ratings, and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.

Originally Posted on April 1, 2021 – Bitcoin’s Rise Is Luring Everyone from Goldman Sachs to Chipotle, but a Crash Might Be Coming

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from The Business of Business - Thinknum Media and is being posted with permission from The Business of Business - Thinknum Media. The views expressed in this material are solely those of the author and/or The Business of Business - Thinknum Media and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Disclosure: Bitcoin Futures

Trading in Bitcoin futures is especially risky and is only for clients with a high risk tolerance and the financial ability to sustain losses. More information about the risk of trading bitcoin products can be found on the IBKR website.If you’re new to bitcoin, or futures in general please visit CME Bitcoin Futures.

Disclosure: Futures Trading

Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at ibkr.com.

trading top