Fundstrat has put out another price prediction for Bitcoin, and this time, one of its analysts sees it being as high as $64,000 by next year.
This price prediction is interesting because it is based on the growth of mining activity.
Let’s discuss.
Mining’s role
In the note, Fundstrat predicts that the hash power used to produce the crypto will grow a whopping 350% through 2019.
Sam Doctor, head of data research at Fundstrat, said in the report:
"We believe the current path of hash power growth supports a BTC price of about $36,000 by 2019 year end, with a $20,000-$64,000 range."
In the report, which we share from CNBC, it’s noted that the economics of Bitcoin mining will likely create a support level for the cryptocurrency.
Bitcoin miners are more likely to hold their crypto as long as the price doesn’t fall below break-even for operating costs. Then they’ll sell as the price rises, which gives them higher profits.
During a conference call Thursday, Doctor said:
"The primary net sellers, in our view, are bitcoin miners, and the rest are transactions between investors.”
One of the more popular mining machines used is the Antminer. Fundstrat estimated that as of May 6, the cash break-even price for the older Antminer S7 model was $6,003 per bitcoin, and $2,368 for the newer Antminer S9.
A new generation of rig hardware is expected, which Doctor said should trigger a new round of capital expenditures. It should also lead to hash power growth, which could accelerate if Bitcoin’s price rises.
Bitcoin’s price to soar
This mining report comes on the heels of Fundstrat’s founder Tom Lee’s report about an impending price rally.
Lee, among others in the crypto space, have pointed to next week’s Consensus 2018 Conference as a reason Bitcoin’s price could soar significantly. The conference is slated to run from May 14 through May 16.
We reported earlier this week about Lee believing that Bitcoin’s low price (around $9,102 at the time of writing Thursday) combined with the fact that Bitcoin has always displayed significant gains (between 10%-70%) during and after previous Consensus conferences, means the stage is set for another Bitcoin rally.
This article appeared first on Cryptovest
