Bitcoin is becoming ‘digital gold’ and there is a case to be made for the recent price surge to continue to $100,000 by 2021, says Hong Fang, CEO of OKCoin, one of the largest crypto exchanges in the world.
Fang argues that should bitcoin catch up to even 25% of gold’s global market capitalization of $9 trillion, that figure would amount to a price range for BTC of $80,000 to $100,000.
“The fundamental value proposition for bitcoin is that is a great store of value,” Fang said, drawing similarities to gold.
Other facets of bitcoin that add to its value are its durability, scarcity, accessibility, divisibility, and censorship resistant, Fang noted.
Mainstream acceptance of bitcoin as a “digital gold” has been slow, but will rise as people gain trust in the asset, Fang said.
“Bitcoin is the first native internet money that we have seen in our human history and it is doesn’t have a physical presence, that’s also why I think it takes a long time for people to actually appreciate the value and the uniqueness of it,” she said.
With bitcoin nearing 2017 highs, parallels have been drawn to the price action of three years ago. Fang noted some important distinctions, particularly with who the primary buyers of bitcoin are now.
“Back in 2017, the price tag was pretty much due to ICO run, which brought in a lot of speculative trading demand around the world, particularly in Asia. When you think about supply and demand for an asset like bitcoin, it doesn’t generate cash flow itself, therefore it is very much a demand and supply play. Back in 2017, the supply was fixed…21 million at most,” she said. “On the demand side, back in 2017, a lot of that demand was very fickle. It’s very speculative trading driven. Fast forward into 2020, there’s a lot of stuff happening that is changing the dynamics there.”
She added that a lot more institutional capital is flowing into bitcoin now, compared to 2017.
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