What Would It Take For Bitcoin to Reach $50,000 In 2018?

We have seen several notable figures in the cryptocurrency space predict Bitcoin to more than double its $20,000 all-time high and reach a $50,000 valuation by the end of 2018. Some of the people who have made this prediction include BitMEX co-founder Arthur Hayes, Blockchain Capital’s Spencer Bogart and TenX co-founder Julian Hosp. Right now, these predictions seem very unlikely to materialize, but Bitcoin is no stranger to explosive moves.

Twitter user “CypherSpook” has produced a neat chart showing what a possible BTC run up to $50,000 would look like:

This is what 50k looks like by the end of 2018 pic.twitter.com/ReUyvMBQl5 — Spook (@CypherSpook) July 6, 2018

In the past nine years, Bitcoin has already experienced severe market corrections which depressed the price down by 70 to 90 percent before recovering and reaching new record high prices and settle on new, higher support levels.

Julian Hosp, president and co-founder of crypto wallet and card start-up TenX, recently shared his views in a CNBC interview:

"Back then, December, price was at $20,000 all-time high. I predicted for 2018, we're going to see $5,000 and $60,000. So $5,000, we pretty much hit it, so let's see if we can do the $60,000. I'm still quite confident."

He acknowledged, however, that a "massive positive event" would need to occur to get Bitcoin to the $60,000 mark in 2018.

Massive Positive Event

Such a massive event might very well be the approval of a Bitcoin exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC). The biggest options exchange in the U.S., CBOE, recently filed a request to list a Bitcoin ETF with the SEC, increasing the probability of the first ever in Bitcoin ETF in the country being approved. An ETF approval would pave the way for the big institutional investors to enter the market easier, which would in turn increase the trust in cryptoassets as a whole and attract more small investors.

To convince the SEC to approve the use of Bitcoin ETFs that would allow accredited retail investors in the public finance market to invest in Bitcoin with insurance and custodianship, Bitcoin ETF developer SolidX, has joined forces with international investment management firm VanEck which specializes in a variety of different ETFs outside of the crypto realm.

Not only the possible approval of the ETFs, a positive change in regulations for cryptocurrencies, a shift by major banks to provide crypto custodianship that would ensure investors that their money is safe regardless of possible cyber-attacks, could also be possible catalysts for a strong bull market in the second half of 2018.

Another important factor that could push the cryptocurrency market in a positive direction if these scenarios materialize is the sheer amount of new fiat that would enter circulation through the fiat multiplier effect. Estimates from an analyst at Citibank show that the fiat multiplier might be as high as 50x for some crypto assets.

In May, reports started circulating that ICE, the parent company of the New York Stock Exchange is preparing to offer cryptocurrency custodianship services. In response, CNBC analyst Brian Kelly commented:

“Up to this point, it has been very difficult for them [institutional investors] to get comfortable compliance wise in holding cryptocurrency. If ICE has a custodian solution that is SEC compliant, that’s going to open the floodgate.”

Very recently, cryptocurrency broker Coinbase has released an institutional-grade custody service that only accepts clients with a balance of $10 million or more. According to Coinbase, the service already has 10 clients.