Joe Kernen, popular co-host of CNBC’ Squawk Box, has recently suggested on the show that the king coin could reach $55,000 by next year’s halving. This is one of a few bullish comments Kernen has expressed in recent times.
What Could Push Bitcoin that High?
On Monday the 29th of July, while talking to the episode’s guest – Fairlead Strategies founder and Managing Partner, Katie Stockton – Kernen asked her whether or not she believed that Bitcoin could surge more than 470% and hit $55,000 by next year. One of the reasons Kernen believes this could happen is Bitcoin’s upcoming halving.
Expected to happen by May 2020, the halving will see a reduction in the number of Bitcoins being mined, by exactly half. Miners currently receive 12.5 BTC per block and this number is expected to drop to 6.25 BTC. This was done from Bitcoin’s inception as a way to control inflation for the coin and to also make sure that only 21 million coins will ever be produced. Bitcoin’s halving takes place after every 210,000 blocks which roughly takes four years.
The traditional laws of supply and demand dictate that prices will increase if supply is reduced and demand is still growing. Also, there is usually a recorded increase in Bitcoin’s value after every halving since its inception more than a decade ago. Some analysts already posit that Bitcoin could hit $20,000 before the end of the year and if that happens, then it’s possible that it could be higher than that figure, post-halving.
The Stock to Flow Model
Kernen also mentions the Stock-to-Flow ratio as a possible explanation for a Bitcoin surge. This model tries to make a connection between the number of assets already produced and possible inflation. It posits that Bitcoin has a stock-to-flow ratio of 25, derived from the calculation that at current speed and with halvings, the current amount of produced Bitcoins, about 17.5 million, can only be re-produced after another 25 years.
This ratio, according to the model, is tied to Bitcoin’s value and will rise after the next halving. If this happens as expected, the model proposes that Bitcoin’s market capitalization could hit $1 trillion from the $170 billion where it is. A market cap this high supports a value of $55,000 per Bitcoin.
Peter Schiff Warns Of A Possible Crash Of Bitcoin Below $2,000
Peter Schiff, a stockbroker, and financial commentator took to Twitter recently to voice his opinion on the direction of BTC. Though he said the crypto asset is on his way to $6K, however, warns that things can go worse, driving price below to $2K.
A Possible Crash Below $2,000 For Bitcoin (BTC)
Peter Schiff, is known for his love for gold while exhibiting intense hate for bitcoin. However, he has kept an eye on bitcoin, updating the community about its impending crashes to prove his point that bitcoin is worthless.
Though he admitted possessing some bitcoin, his recent tweet still shows he doesn’t see the asset as a wise choice for smart investors.
Peter Schiff, in his recent tweet, expressed how horrible things were looking for bitcoin. According to Mr Schiff, bitcoin is in a move to complete a popular pattern, the head-and-shoulder, which will see the asset drop in value to about $6,000. Furthermore, he opines that bitcoin could slump drastically below the $2,000 mark if the pattern is completed.
While many do not agree with Peter Schiff, some others think bitcoin crashing below $2,000 would be an opportunity to buy more bitcoin.
All these, however, is happening at a time when the institutional traders are trying to pick some interest in bitcoin as trading on the futures exchange, Bakkt, continues to rise.
At the time of writing, bitcoin is currently trading at $8,062.72, with a market cap of over $145 billion according to CoinMarketCap.
Ripple Sends $26 Million Worth of XRP to Jed McCaleb, XRP Army Fears Another Dump in Price
Time and again, several members of the XRP community have opined that the massive dump of the crypto asset in the market has impacted on its price, negatively. Now, there are speculations for another dip in XRP’s price. The latter is after Whale Alert informed on September 7, 2019, that 100 million XRP tokens have been transferred to Jed McCaleb, Ripple’s co-founder.
Ripple Sends XRP Worth About $26 Million to McCaleb’s Wallet
According to Whale Alert, Ripple transferred 100 million XRP valued at $26,322,440 to Jed McCaleb’s wallet. The transfer has led to the sentiment in the crypto space that XRP might tank below its $0.262 price today. Also, the opinion is due to McCaleb’s reputation for dumping huge amounts of XRP in the market.
McCaleb is Ripple’s co-founder, and in 2014, Ripple transferred 9 billion XRP to him as his share for founding the company in 2012. However, the blockchain company entered a seven-year agreement with McCaleb to control how much XRP he can sell in the market yearly.
Per the agreement, the co-founder could sell $10,000 worth of XRP per week in the first year, $20,000 per week in the second, third, and fourth years, and “750 million XRP per year for the fifth and sixth years.” In the same vein, he could choose to dump 1 billion XRP yearly for the seventh year, and 2 billion XRP yearly after the seventh year.
McCaleb’s Dump of XRP Impacts of Asset’s Market Price
Given that this is the fifth year since the agreement was made, McCaleb can choose to dump thousands of XRP tokens daily. In 2014 when he announced his plans to sell a significant part of his XRP holdings, the value of the asset declined by 40%. As such, the continuous dump of the asset has also been pointed out as one of the reasons why it is not spiking like other top cryptocurrencies.
Asides from being reputable in the XRP community, McCaleb is also a name associated with Mt Gox, one of the first cryptocurrency exchanges. He founded the platform and sold it off years before its hack. Similarly, McCaleb is the creator of Stellar (XLM), the 11th largest cryptocurrency by market cap.
Nonetheless, the crypto community has aired its views about the potential for McCaleb to release another share of XRP to the market. Crypto BitLord, for instance, said: “Wow. Another cool $26M Jed can unload at market. This shits out of control.” Another remarked that: “know, right?! Private businesses shouldn’t be allowed to exist. The name “Jed” should be banned.”
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