The price of bitcoin is back above $ 50.000, recovering in a few days from one of the biggest drops in its history. What triggered this new bull run? Many believe it was the statements of Tim Draper, an important investor.
Bitcoin was trading below $ 44.000 earlier this week, having reached an all-time high the week before at $ 58.000. This rebound suggests that the third major rally in its history may still be underway, with Draper saying it has the potential to further increase 100 times.
An auction that went really well
The billionaire venture capitalist first gained prominence within the crypto community when he bought a batch of bitcoins confiscated by Silk Road founder Ross Ulbricht. The 2014 auction of 29.657 bitcoins was bought for $ 19 million. At current exchange rates, those bitcoins are worth more than $ 1,4 billion.
At the time, he said bitcoin would go from around $ 400 to $ 10.000 within three years. His prediction was largely criticized, but it turned out to be correct within a few weeks.
He has since remained optimistic about bitcoin's future prospects, claiming that in 2019 the cryptocurrency would surpass its previous high of $ 20.000, reached in late 2017.
“I think bitcoin in 2022 or early 2023 will reach $ 250.000,” he said at the time, when bitcoin was worth less than $ 4.000. "I think the reason is that bitcoin will become the preferred currency."
Speaking this week on Unstoppable Podcast, Draper lived up to his 2019 prediction and went into more detail on what he thought bitcoin's market cap could achieve.
"The current fiat currency position is around $ 100 trillion and bitcoin's market cap is reaching $ 1 trillion now, so there's no reason it can't increase 100x," he said.
"It's not like it will completely replace the dollar, although I think people will laugh when they try to buy things for dollars in the future."
He is certainly not the only one who believes in Bitcoin
Bitcoin's most recent surge was backed by major investments from high-profile companies, most notably a $ 1,5 billion buy-in from Elon Musk. Other investments by Square, the payments company run by Twitter co-founder Jack Dorsey, also helped the bitcoin price recover from last week's dip.
Additionally, Microstrategy also added bitcoin to its already sizable holdings, buying another 328 bitcoins for around $ 15 million this week.
When asked to predict which companies might enter the space, Draper said he thought retirement funds would be next, as well as potentially more Fortune 500 companies.