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After a months-long slump during which it fell more than 50%, the price of bitcoin surged back to life Sunday night, hitting the $40,000 mark for the first time since May before paring back below $38,000.
The sharp move, which represented about a 35% gain from bitcoin's most recent lows below $30,000, was catalyzed by a massive short squeeze, where investors with short positions on bitcoin were prompted to cut their losses and close positions by buying, therefore spurring further gains.
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For Haohan Xu, CEO of the crypto-trading platform Apifiny, the move represented a broader momentum shift that will lift bitcoin to old highs. Xu told Insider Monday afternoon that he thinks the price of bitcoin will "easily" rise back to $60,000 before the end of the year.
There are a number of reasons Xu cited for why he thinks the asset is set to soar again. Some are recent news developments, like Jack Dorsey, Cathie Wood, and Elon Musk speaking positively about bitcoin at a recent conference, or Amazon posting a job opening for a crypto expert, creating speculation that the company could one day accept the cryptocurrency as payment.
But there's also that institutions, including companies and investment shops, will continue to sink money into it, he said. This was helped by the recent drop in price, he said.
"I think people don't realize that when bitcoin dips below a certain support, institutions actually think differently than everyone else," Xu said. "They usually are trying to look for the right entry points — $29,000 was definitely a good interest point, and a lot of institutions definitely took on bitcoin during that time onto their balance sheet because it was really cheap. You'll see people announcing that in the coming weeks."
He cited the fact that banks like Goldman Sachs are beginning to offer crypto brokerage services for their family office clients, which he said "definitely shows a lot of demand coming into the market yet."
Xu also said that bitcoin's price would benefit from the fact that it allows for a more efficient mode of payment than fiat currency like the US dollar.
"US dollar, all the fiats, they move through a centralized claim settlement system. You want to wire US dollars to someone domestically, it goes through Fedwire…that takes at least a day," Xu said. "With bitcoin, no matter how much money you're sending, whether that's $100 of bitcoin or $1 million of bitcoin, that only takes about 10 minutes. Bitcoin as a currency clears and settles on the blockchain."
Longer term, Xu said he thinks bitcoin will "definitely" and "easily" surpass the $100,000 mark. He said others' price targets of $2 million is "aggressive."
Katie Stockton, a technical analyst for Fairlead Strategies, said in a note on Monday that bitcoin could rise to $51,000 if the price first climbs to $43,000.
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See Also:
- We asked 10 crypto traders to show us the apps they use on their phone to trade, track prices, and read news
- With bitcoin at a 6-week high, the chief economist of a blockchain data firm shares 2 key metrics he watches to stay on top of price trends — and breaks down one chart that shows the crypto bull market is far from over
- 5 crypto experts explain why bitcoin is charging back into a bull market after a brief dip below $30,000 — plus 3 under-the-radar ways to gain balanced exposure to the crypto ecosystem
