Bitcoin and cryptocurrency prices have swung wildly through May as panic sweeps the market in the aftermath of a major stablecoin’s collapse—with worrying doubts emerging over similar cryptocurrencies.
The bitcoin price has this month dropped to lows not seen since late 2020, sparking fears over the broader crypto market.
Now, the chief executive of Microstrategy, Michael Saylor, has predicted the bitcoin price will eventually go “into the millions”—calling regulation that’s now expected as a result of the recent stablecoin terraUSD (UST) wipe out “good for the industry.”
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“There’s no price target,” Saylor, who began buying bitcoin in the summer of 2020 when it was trading at around $10,000, told Yahoo Finance. “I expect we’ll be buying bitcoin at the local top forever. And I expect bitcoin is going to go into the millions. So we’re very patient. We think it’s the future of money.”
Microstrategy, a business intelligence software company that has pivoted to become a bitcoin acquistion vehicle, has bought almost 130,000 over the last two years at an average price of just over $30,000. The bitcoin price soared to almost $70,000 late last year.
However, the bitcoin price and wider crypto market has been hard hit by a downturn that’s also weighed on stock markets, triggered by the U.S. Federal Reserve’s plans to raise interest rates and trim its yawning $9 trillion balance sheet.
The crypto market has been further impacted by the collapse of the stablecoin terraUSD and its support coin luna. The stablecoin market is now braced for a regulatory crackdown that Saylor expects to be a positive thing for the emerging crypto economy.
“That’ll be good for the industry,” he said. “Over time, I think as people get educated and as they get more comfortable, I think we’ll recover from this drawdown.”
“I agree with Saylor, as an event of this magnitude forces governments to act fast with providing regulatory clarity,” Marcus Sotiriou, an analyst at the U.K.-based digital asset broker GlobalBlock, said in emailed comments, adding the UST collapse “will accelerate regulations of stablecoins and security tokens, which will have a positive impact on the industry.”
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Earlier this month, U.S. Treasury secretary Janet Yellen called for “urgent” stablecoin regulation to be created this year as a result of the UST meltdown.
Saylor continues to expect institutional investors to flock to bitcoin, arguing it’s “superior” to other forms of money. Bitcoin’s dominance, a measure of bitcoin’s value compared to the wider crypto market, has increased in recent months as traders flee riskier assets.
“Once people figure out why bitcoin is superior to everything else, then the institutions are going to come in with large sums of money, and we’re not going to have to struggle through this massive explanation of why we’re different than 19,000 other crypto tokens,” Saylor said.