Bitcoin has rallied nearly 70% so far this year — and industry insiders who spoke to CNBC remain bullish, with one saying the world’s biggest cryptocurrency could reach new heights.
Bitcoin previously hit its all-time high of $68,990.90 in November 2021. Since then it has fallen about 60%.
Marshall Beard, chief strategy officer at U.S.-headquartered cryptocurrency exchange Gemini, said $100,000 could be a possibility for bitcoin.
“I think bitcoin probably breaks all-time highs this year,” Beard said, adding that the $100,000 price figure is an “interesting number.”
Beard said that if bitcoin gets to its previous record high of near $69,000, “it doesn’t take much more for it to lift up” to $100,000.
Bitcoin would need to rally around 270% to hit $100,000.
Paolo Ardoino, chief technology officer at stablecoin issuer Tether, said bitcoin could “retest” its all-time high near $69,000.
The predictions of new record highs mark a more optimistic outlook than in January when industry executives told CNBC that they expected 2023 to be a year of caution.
Is bitcoin finally becoming ‘digital gold’?
Part of the industry’s positive view on bitcoin right now actually stems from how the asset has performed during the banking turmoil sparked by the collapse of Silicon Valley Bank and the failure of two crypto-friendly lenders Silvergate Capital and Signature Bank.
Instead of crashing, bitcoin rallied.
Bitcoin proponents say this is evidence that bitcoin is offering an alternative to the traditional banking system as a place for people to keep their money safe.
“I think the rally is explicable by saying, people have got freaked out by the banking system by the collapses,” Oliver Linch, CEO of Bittrex Global, told CNBC in an interview at Paris Blockchain Week on Thursday.
For many years, bitcoin advocates have argued bitcoin is a form of “digital gold” — a safe-haven asset that can provide investors a hedge against inflation and an investment in times of turmoil. But over the past few years, bitcoin has traded in correlation with stocks, in particular the tech-heavy Nasdaq.
There are now signs of decoupling with bitcoin massively outperforming the Nasdaq, many other risk-assets and gold this year.
But bitcoin also got a boost on hopes the banking crisis maybe reduce the U.S. Federal Reserve’s ability to be as aggressive on interest rate rises, which would be supportive for risk assets like cryptocurrencies.
The $1 million bitcoin bet
Discussion of where the digital coin’s price could go this year has been rife since Balaji Srinivasan, an investor and the former technology chief at Coinbase, wagered on Mar. 17 that bitcoin would be worth $1 million or more in 90 days. He bet $2 million.
The wager was in response to a Twitter user who said that they would bet $1 million that the U.S. does not enter hyperinflation.
Srinivasan argued that the “world redenominates on Bitcoin as digital gold” as hyperinflation kicks in, erodes the value of the U.S. dollar, and nations, individuals and companies begin to buy large amounts of bitcoin. Hyperinflation is the massive rise in prices in an economy.
A $1 million price on bitcoin would represent a roughly 3,600% increase from the digital currency’s current price.
Most people have poured cold water on this prediction.
Gemini’s Bear said “there’s probably a world where bitcoin hits a million dollars” but not in 90 days as Srinivasan wagered.
“I think for bitcoin to be a million dollars in 90 days, some crazy things are happening in the world, which we don’t want,” Beard said, adding that it could take 10 years to get anywhere near that figure.
Tether’s Ardoino echoed the sentiment that if bitcoin were to hit $1 million in 90 days, it would likely mean an unusual economic event.
“I’m kind of skeptical about that, because honestly, I wouldn’t even hope for that,” Ardoino told CNBC in an interview at Paris Blockchain Week, that aired Thursday.
“Because if bitcoin would reach such a high price level, [it] would mean that the entire economy will crumble. I’m not sure [that] is the world that we want to live in.”