Despite Bitcoin recently experiencing volatility, the asset is attempting to mount another resurgence towards a new record price. Crypto hedge funds are therefore increasingly projecting the asset to hit a new level towards the end of the year.
Data presented by cryptocurrency trading simulator Crypto Parrot indicates that 65% of 55 crypto hedge funds who participated in a survey remain bullish, predicting that Bitcoin will trade between $50,000 and $100,000 by the end of 2021. Another 21% believe the asset will hit the $100,000 to $150,000 price mark by December 31, 2021.
About 9% of the hedge funds also project a positive outlook stating that Bitcoin will trade at between $150,000 and $200,000 while 4% put the price target at $200,000. However, only 1% of the hedge funds project Bitcoin to trade below $50,000.
Elsewhere, the hedge funds at 63% also predicted the cryptocurrency market capitalization would hit a value of between $2 trillion and $5 trillion. About 21% projected the market cap to range between $1 trillion and $2 trillion by the end of the year.
Another 11% put the market cap at between $5 trillion to $10 trillion, while 2% put the projections upwards of $10 trillion. However, 3% believe the market cap will be below $2 trillion by the end of the year.
Institutional investment to potentially drive Bitcoin’s price
With a majority of the hedge funds presenting a bullish outlook for Bitcoin, the report highlights some of the potential drivers. According to the research report:
“A possible influx of institutional capital will also propel Bitcoin’s market capitalization to new levels. The asset’s market cap has previously caught the financial world’s attention by surpassing the valuation of traditional financial institutions like leading banks. Such developments have led Bitcoin to remain resilient mainly due to existing and potential investors becoming numb to negative news around the cryptocurrency.”
However, the price projection might be hampered by the unclear regulatory outlook in most jurisdictions. Historically, negative regulatory news around the asset has resulted in the price dropping.