Everyone’s heard about the amazing, meteoric rise in the price of Bitcoin over recent weeks and months. Last summer I wrote a piece when it was $2,700 per coin suggesting that it might have a lot further to rise, although I wasn’t sure one way or the other. Plenty of people were sure it was about to crash. I am sure it will fall by at least 50% very quickly some time relatively soon, although how soon is anyone’s guess. Bitcoin is now trading just a little under $20,000 per coin, making a new all-time a couple of hours before the time of writing at $19,666. It would not be surprising if the price was trading at or even beyond $20,000 within the coming hours.
Some analysts had thought that with the start of Bitcoin futures trading on a major exchange such as the CBOE, which began a few days ago, the pace of the amazingly fast upwards movement would slow or even reverse, as the futures contracts finally provided a reliable way to “short” the price of Bitcoin on a big scale. However, it doesn’t seem to have had the anticipated effect. Some have speculated that if deliverable options were offered instead of cash-settled futures, it might have had a cooling effect on the price.
How much higher can it go? It’s not smart to pick tops of bottoms, but it is true that they are a little more likely to happen at major psychological number, which are usually big round numbers, including – you guessed it - $20,000. There was quite a lot of turbulent price action when Bitcoin first made $10,000 and $15,000 so even if it doesn’t top out at $20,000, it is not unreasonable to expect a bumpy ride with some drops.
