Investment tycoon Tim Draper said this week that Bitcoin (BTC) could hit $250,000 by 2022.
CNBC Fast Money’s Brian Kelly has came out in support of this prediction in a CNBC interview from April 13.
In response to a question about Draper’s high prediction, Kelly responded that although “it sounds crazy,” when one considers that BTC already had a 4,000 percent return over two years, a 3,000 percent return over four years could be a “continuation of the trend we’ve seen.”
Kelly continues by noting that an increase of institutionalized money into the crypto sphere - Rockefeller’s VC arm, a Goldman Sachs executive, and Soros Fund Management - may dampen the volatility of cryptocurrencies, making them easier to use as actual currencies, and making it take four years (rather than two) to reach Draper’s suggested 2022 price point.
Right now, the most common use case for crypto in Kelly’s opinion is citizens in countries with unreliable governments or banking systems. After being questioned by a friend as to why anyone would risk losing 20 percent or more with a crypto investment, Kelly said that he responded: “Well, listen, it’s better than losing 100 percent if your assets are seized by a rogue government.”
When asked about how Fundstrat’s Tom Lee’s analysis of a crypto selloff before tax day being the reason for the market’s downswing since the new year can be reconciled with the fact that about two thirds of the crypto market’s volume are in Asia (and thus unaffected by US tax day), Kelly referred to tax selling as just the “fuel on top” of the market trend.
According to Kelly, the parabolic run as well as a decrease in transactions, as well as the Mt. Gox sell off, all contributed to the market’s past downward swing.
The key point for Bitcoin to reach $250,000 by 2022, or $25,000 by 2018, is for transaction volume to increase, according to Kelly:
“If the number of transactions [...] catch up a bit, then I do think we’ve bottomed here and I do think we’ve got a sustainable bull run ahead of us.”
This week, crypto hedge fund Pantera Capital predicted that BTC will reach $20,000 again by the end of this year, as the $6,500 mark was a probable bottom.