- Cryptocurrencies have had a volatile start to 2021.
- Greg King, the CEO of Osprey Funds, shares with Business Insider why he thinks bitcoin and ethereum are positioned to double from their December 31 levels.
- Visit Business Insider’s homepage for more stories.
Cryptocurrencies stole headlines on the first stock-market trading day of 2021, with bitcoin and ethereum selling off steeply after blistering run-ups over the weekend.
But investors need not worry about too sharp a drop in the digital currencies, said Greg King, the CEO of Osprey Funds, which is in the process of developing a bitcoin trust similar to the one operated by Grayscale.
“As far as this little sell-off here, that seems a very natural thing and healthy thing after a big run-up to have a little bit of a sell-off and consolidation,” King told Business Insider on January 4. “That’s just how markets move.”
While King said he didn’t have a near-term prediction for bitcoin’s price action, he said he disagreed with those calling for a dramatic decline to continue. Since bitcoin’s price has stayed above previous highs of $20,000 for at least a few days, its most recent upward swing was part of a larger move higher, he added.
King said ethereum could drop to about $800 to $900 from its current levels of about $1,000 before continuing its upward trend.
And that upward trend — for both bitcoin and ethereum — has strong potential to be significant, King said. He said he “would not be surprised if bitcoin and ethereum log triple-digit gains in 2021, as they did in 2020.”
In other words, from December 31 levels, King thinks bitcoin and ethereum could at least double in price by the end of this year.
That would put bitcoin’s price at more than $58,000 and ethereum at roughly $1,486 before 2022.
King’s outlook on the two cryptocurrencies has proved accurate since Business Insider spoke with him on November 18. During that interview, King said bitcoin still had “a long way to go” and that Ethereum was “here to stay” and the cryptocurrency he was most bullish on outside bitcoin.
Since then, bitcoin has risen more than 75%, and ethereum well over 100%.
On Monday, King said his bullish views on the digital currencies had only strengthened.
One reason for this is their continued adoption, with publicly traded companies and institutional investors increasingly putting their money into them — especially bitcoin.
Another is the increasing likelihood of inflation ahead after fiscal and monetary stimulus efforts to aid the economic recovery, King said.
“It seems even more clear that we have an environment of easy money, so the inflationary pressures are increasing, or are at least being sustained,” he said. “Since a few months ago, that’s just been more reinforced, I think, with what’s gone on in the government and Congress and the solutions that are being proposed for dealing with the financial ramifications of the pandemic.”
And there’s simply momentum.
“I think there’s enough critical mass there to say that it’s the leader, and it’s already successful and going to continue to be more successful,” King said of ethereum, adding that it had yet to cross its previous all-time high, like bitcoin has, of about $1,400. “I certainly think there’s a lot of room for ethereum to the upside.”