- Bitcoin is nearing its 2017 levels, its price now sitting above $18,000.
- Osprey Funds’ Greg King told us why he still thinks the cryptocurrency has more upside potential, saying the venture capitalist Tim Draper’s prediction of $250,000 is “possible.”
- Visit Business Insider’s homepage for more stories.
In 2017, the price of bitcoin surged to nauseating heights. Then it came crashing down.
After closing at $876 on January 2, 2017, it began its journey to it’s all-time-high price of $19,783 in December that year, before falling back towards $3,000 over the next 12 months.
Now, the price of the cryptocurrency is jumping again. It currently sits at over $18,000.
This is because of factors like an increase in institutional investors in the space, heightened demand, and a broadening normalization of the asset — PayPal, for example, recently announced that it will allow cryptocurrency transactions on its platform.
Some fear the hype is overblown, however, and that a repeat of bitcoin’s Icarus-like fall is bound to occur.
But according to Greg King, CEO of Osprey Funds, while the cryptocurrency may see its price drop in the short-term, it still has a lot of room to run in the longer-term. King has been creating cryptocurrency investment products — like the Osprey Bitcoin Trust — since 2016.
“I do think that you could see a pullback because it’s been a big run, but in the grand scheme of things, I still think there’s a long way to go in terms of the potential upside for bitcoin,” King told Business Insider on Wednesday.
Bitcoin bulls have been making eye-catching predictions for its price trajectory. Billionaire Mike Novogratz said on CNBC on Wednesday that by the end of next year it could hit $60,000. Venture capitalist Tim Draper has said bitcoin will rise to $250,000 by sometime in 2023, a prediction that King said is “possible.”
While King declined to share his own price target for bitcoin, he broke down why it is bound for growth over the coming decade-plus.
Why Bitcoin is primed to surge in the years ahead
For one, King pointed to coming inflation and the all-time-high money supply that currently exists following huge monetary and fiscal stimulus this year.
“The money supply is exploding, and at the end of the day that can’t happen without inflation,” King said. “Conversely bitcoin is a finite instrument. There aren’t more bitcoins that will ever be made. They’re coming online in a predetermined fashion because of the mining and how that works. And at some point maybe down the road it could even become deflationary.”
King also said the increasing normalization of the cryptocurrency and the incorporation into the economic infrastructure that has been contributing to its skyrocketing price in recent days is bound to continue.
He added that this will only grow the demand for the asset.
“The fundamental case for bitcoin is there, and I think the on ramps are being built,” he said. “So it just seems like the arrows are pointing to significant additional investment coming into the space and because of the finite amount of bitcoin available, just the supply and demand balance will tend to push prices higher over time.”
Investors seeking exposure to bitcoin without directly trading the cryptocurrency might consider products like the Grayscale Bitcoin Trust (GBTC).
The other cryptocurrency that’s here to stay
While King is most focused on bitcoin, he said Ethereum — the cryptocurrency with the second-highest market cap, is here to stay.
“We believe Ethereum is a platform that is here to stay and has enough of an infrastructure built out to support a long-term potential investment. Just the fact that they have mobilized such a large ecosystem makes us think that Ethereum is here to stay at this point,” King said.
He added: “They have competitors — there are certainly other platforms looking to improve upon what Ethereum has built. But it’s the number two cryptocurrency in terms of market cap for a reason.”
Investors looking for exposure to Ethereum might consider the Grayscale Ethereum Trust (ETH).