The volatile digital currency, bitcoin, finally hit the $400 mark for the first time recently in the current year, and Wall Street has predicted that there is a real chance that this number will continue to rise.
The brokerage firm, Wedbush Securities revised its 12 month bitcoin price target, and is now predicting that the value of bitcoin will rise to $600. They claim that the growing interest shown by large financial institutions has led to the price surge and the revision. The institutions have shown particular interest in the specific technology behind bitcoin, known as the blockchain.
Bitcoin has a colorful, and not to mention – notorious reputation. It has been used for legitimate purchases such as cars and computers to highly illicit materials such as drugs. The digital currency data tracker site called Coindesk reported that the $400 mark was crossed the first time this year on November 3rd. The highest level reached was almost a 50% increase in value since January.
The collapse of the bitcoin exchange, Mt. Gox led to a downfall in the bitcoin value and its reputation as a good investment. In fact, it has been called the worst investment of the year in 2014 after its value fell by a whopping 58%. However, the digital currency seems to be gaining some momentum again.
A day before the value peaked, Magister Advisors, a firm which functions in an advisory capacity during tech mergers, reported that the top 100 financial institutions are predicted to spend some $1 billion on projects related to blockchain technology over the next 2 years. The firm went on to say that their estimates see bitcoin becoming the world’s 6th largest reserve currency in a period of about 15 years.
Bitcoin value has also been boosted by a European Union decision which was made in October. The EU declared that they will define bitcoin as a currency rather than a commodity for tax purposes.
Wedbush also suggested that any future gains that the currency sees will be pegged to investments made by Wall Street firms. The major player, New York Stock Exchange and Goldman Sachs have both shown interest in blockchain’s capability to conduct secure and cheap financial transactions.
The experts at Wedbush believe that bitcoin and the underlying technology, blockchains will cause huge changes in the current financial infrastructure, and these changes will not happen far ahead in the future. They will likely occur in the next few years. This ability of bitcoin to cause disruption was included in the report from Wedbush that predicted the $600 value of bitcoin.
The report went on further and said that although the blockchain ledger system is a technology which can be used independently from bitcoin, the interest in bitcoin blockchain will also grow. The analysts further stated that they believe that some applications will also be created which use a distributed ledger in a limited capacity, i.e. without a valuable native token. However, these will be small in number.
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