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BCA Research bases its analysis mainly on the study of fractal patterns.
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The bitcoin network effect has substantial upside potential for the price.
With the price of bitcoin (BTC) approaching $100,000, many are wondering: is it time to sell or hold? The answer varies depending on the perspective, but for BCA Research analysts, bitcoin will reach $200,000, at least.
Dhaval Joshi, head of investment strategies at BCA Research, assures that the advance of bitcoin has always been a game of “two steps forward and one step back.”
Although its recent rise has been driven by political events, such as the victory of Donald Trump in the United States, a candidate considered pro-bitcoininvestors should prepare for short-term correctionsjust as happened in April.
This happened after BTC set an all-time high of $73,800 last March, as a result of the good performance of the spot bitcoin ETFs issued in January of this year, as reported by NoticiasVE.
The specialist points out that this volatility does not alter the long-term perspective, where the structural upward trend remains in force. According to Joshi, In a “multi-year horizon,” bitcoin could surpass $200,000.
The company estimates that price for the digital asset based on the study of fractal patterns.
A fractal is a pattern that repeats at different scales and manifests itself as recurring patterns on asset price charts. Fractals can help identify bullish or bearish trends more accurately by revealing changes in market dynamics.
Bitcoin and gold
To understand the future of bitcoin, Joshi proposes a comparative analysis with goldanother non-forfeitable asset that has stood the test of time.
Historically, the value of gold was tied to its relative scarcity compared to other precious metals, such as silver.
However, since the transition to a fiat monetary system in the 20th century, its value has largely depended on its “non-confiscatableness.”
In Joshi’s words, gold is a refuge against inflation and banking collapse, characteristics it shares with bitcoin. But, unlike precious metal, bitcoin offers additional advantages: “it is more difficult to expropriate and its supply is finite, which reinforces its attractiveness in a financial system based on fiat money.”
The following chart presents a comparison between the evolution of the US banks index (LS) and the price of bitcoin (RS) during a period that includes the bankruptcy of Silicon Valley Bank (SVB) in 2023, a bank oriented to the technology sector, based in California.
There is a clear opposite trend between the two assets. While the US bank index experiences a significant drop, especially after the SVB bankruptcy, the price of bitcoin shows an upward trend.
The power of the network effect
Both gold and bitcoin They benefit from what is called the “network effect.”. Each new user or investor increases the value of the network, generating a positive feedback cycle. This effect is now the driving force behind bitcoin’s explosive growth.
Bitcoin’s current market value of approximately $1.5 trillion represents less than 10% of the total non-forfeitable asset market, dominated by gold at $19 trillion.
“As bitcoin market share increases and bitcoin supply reaches its upper limit, the price of bitcoin has substantial upside potential.”
Dhaval Joshi, Head of Investment Strategies at BCA Research.
A recurring question is whether bitcoin, based on collective trust, could be compared to a Ponzi scheme. Joshi says no. Unlike a Ponzi scheme, which depends on unsustainable exponential growth, bitcoin’s network effect is stable and persists as insurance against systemic risks.
If global wealth increases by 20% in the coming years and bitcoin erodes gold’s share of the non-forfeitable asset market from 90% to 80%, The price of bitcoin could grow by 140%, reaching $200,000.
This scenario, according to BCA Research, is the natural destination of a trend that combines technological and economic advances with the search for financial security.
Although the price of bitcoin may experience declines in the short term, its structural trajectory points to a definitive consolidation as a key asset in the digital age. The question is not if it will reach $200,000, but when.
BCA Research Inc. (BCA) is an investment research company based in Canada. Provides analysis and forecasts of major asset classes and economies with the goal of helping clients make investment decisions.