Stock analytics firm Trefis announced in a 5 June blog post the reduction of its Bitcoin year-end price valuation from USD 15,000 to USD 12,500. It also shared the headline of the article on Twitter, with a link to the original blog post.
Lowering Our Year-End Bitcoin Price Target To $12,500 Due To Weaker Transaction Volume Outlookhttps://t.co/Plya7iHWKo
— TREFIS (@Trefis) June 6, 2018
Supply and demand
Trefis’s price forecast is focused predominantly on the supply and demand of Bitcoin, with demand describing the number of users and transactions and supply referring to the amount of Bitcoin available.
In part, Trefis pointed to a significant downward trend in the number of total transaction volumes across cryptocurrency exchange platforms, with a supply surplus and vast sums of Bitcoin dumped into the market this spring leading to a drop in price.
Due to these factors, the blog post reads: “Adjusting our forecast for transaction volumes… leads to a year-end price target of around $12,500 – down from our earlier estimate of $15,000.”
While Trefis acknowledged that although Bitcoin enjoyed some gains in the final days of May, the month still experienced a sharp decline after reaching nearly USD 10,000.
The Trefis website offers an interactive Bitcoin price estimator, which reflects both the number of individual Bitcoin users and transaction volumes for each month of the year. This feature is a useful addition that allows users to see exactly how their price valuations are calculated.
Not all industry pundits share Trefis’s gloomy perspective on Bitcoin’s future worth, however.
Earlier this year Tom Lee, head of Fundstrat’s research department stood by his predictions of Bitcoin reaching USD 25,000 by the end of 2018. He described the situation as a matter of market timing, noting that if an investor missed the 10 best Bitcoin preforming days every year their annual returns would decrease by 25%.
Venture capitalist Spencer Bogart predicted in May this year that Bitcoin will trade at least above USD 10,000 by the end of December while arguing most altcoins are more likely to be overvalued. For Bogart, he views the institutionalization of Bitcoin as the source of its price stability.
”The institutionalization of Bitcoin is absolutely occurring… Every major bank is trying to do something in the space,” Bogart said.
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