After a two-year long bear market, bitcoin came roaring back in 2016, and has been climbing ever since.
The digital currency reached a new all-time high above $4,650 on Tuesday, an increase of more than 350% year-to-date. The sheer intensity of its gains has inspired some comparisons to the digital currency's initial run-up, which ended with the collapse of bitcoin exchange Mt. Gox in early 2014, marking the end of the first bitcoin bull market.
Given bitcoin's torrid advance, analysts from Bespoke Investments attempted to put its gains in context in a chart. The results are striking: Compared with infamous asset bubbles like tech stocks in the 1990s, bitcoin has climbed much further in far less time. According to Bloomberg, “there’s almost no comparison” between bitcoin and the tech-stock bubble.
“Bespoke Investment Group contrasted the rise in bitcoin with infamous bubbles such as the tech market in the late nineties. There’s almost no comparison. Tech stocks rose just over 1,000 percent over the entire course of their bubble, and bitcoin is already up more than twice that. Take a look.”
According to CoinTelegraph, bitcoin analysts expect the digital currency to finish the year around $5,000.
And some expect the digital currency to go much, much higher. According to the Wall Street Journal, early Snapchat investor Jeremy Liew expects Bitcoin will reach $500,000 by 2030. Security company founder and notable eccentric John McAfee believes it’ll take only three years.
Alistair Milne, a popular bitcoin analyst who has a large Twitter following, calculated earlier this month that bitcoin would already be worth more than $7,000 if the digital currency’s share of the overall crypto market would return to its pre-2017 levels. Bitcoin’s market capitalization now represents less than half of the total for the broader market crypto market, down from about 90% early this year. The drop is largely due to bitcoin rivals like Ethereum and Litecoin, which put bitcoin's YTD rise to shame.
If Bitcoin returned to market dominance of ~84% (where it was before the Bitcoin Unlimited/forking fears), the price would be ~$7000 today— Alistair Milne (@alistairmilne) August 15, 2017
Bitcoin has made a habit out of routinely defying its most ardent skeptics. But the shadow of Mt. Gox still looms large over the digital currency market. And the risk of another bull-market-ending catalyst like a 51% attack on the bitcoin network or another major hack at one of the more mainstream exchanges could force out the week hands, sparking another precipitous drop.