Last month the Wall Street market analyst predicted a huge upturn for the digital currency, reasoning it with a number of factors, including legalization of bitcoin in China and South Korea.
In the beginning of July, Sheba Jafari, the head of technical strategy at Goldman Sachs, suggested that the digital currency would rise to about $4,000 by the end of 2017. This prediction drove the prices up as it urged some investors to buy bitcoin. According to Jafari, the main reasons for the bitcoin growth are, first of all, the expected legalization of cryptocurrency in South Korea, then elimination of consumption tax on bitcoin in Japan and Australia, and finally the upcoming legalization of bitcoin and ethereum in China.
Now, taking into consideration the current state of Bitcoin Jafari predicts it has a minimum target that goes out to 3,212. There’s potential to extend as far as 3,915. It just might take time to get there.
Goldman’s analyst concludes with the following summary: “Bitcoin shouldn’t go much further than 1,857. Eventually targeting at least 3,212.”
Ronnie Moas, a stock research analyst and founder of Standpoint Research, already shared his thoughts that bitcoin can reach $5,000 within this year.
Another expert, John McAfee, the cybersecurity and software pioneer, predicts that the Bitcoin price will move above $500,000 within three years.
Meanwhile, according to the CoinMarketCap Bitcoin retains the first place among all the currencies trading at $3405,89 (losing a bit after hitting the all-time high of $3,484 on Tuesday) with a market cap surpassing $56B.
In order to make the crypto world more “user-friendly” for institutional investors, who still treat crypto world with great caution, Goldman Sachs has published a question-and-answer report focused on most common questions about cryptocurrencies.
Among others these questions include the following:
- Is Cryptocurrency a “Currency” or “Commodity”?
The complexity exists because coins have attributes of a currency as it presented and trusted by some medium of exchange, and commodity due to its limited resource. The classification of cryptocurrencies varies by country, government and even application. In the U.S., the IRS has ruled that virtual currency does not have legal tender status in any jurisdiction. For tax purposes, the IRS treats virtual currency as property.
- What Is Ethereum?
At first it’s a Platform, then a Cryptocurrency. Ethereum differs primarily from Bitcoin as the latter is set up to be an alternative to ‘real money’ while the former is more of a platform set up to run any decentralized application and automatically execute “smart contracts” when certain conditions are met. Ethereum offers its own digital currency called Ether, but this is just one component of its smart contract execution and primarily used to facilitate and reward using the network.
- How Does One Trade Cryptocurrencies in the United States?
Digital Exchanges, Block Trades and (soon to be) Options. Individual investors can trade virtual coins on various online exchanges. Institutional traders have largely stayed out of the cryptocurrency market due to its relatively small size, structure of mandates and volatility, but block trading exists to facilitate the execution of larger orders. In addition, Bitcoin options already exist and are traded on offshore exchanges. Options together with futures may also come to the US soon.
- What is an Initial Coin Offering (ICO)?
Fundraising through token sales. The amount of money funding ICOs has grown exponentially. According to Coin Schedule, ICOs have raised $1.25 billion this year, outpacing global Angel & Seed stage Internet VC funding in recent months.