Now that prices are racing toward $10,000, we're looking at where Bitcoin prices are headed next.
Standpoint Research founder Ronnie Moas, one of the most respected analysts in the industry, projects the price of Bitcoin will reach $14,000 in 2018.
Today, we're going to provide Money Morning readers with all the details on five major catalysts that could push the cryptocurrency to $14,000.
And the first one is Bitcoin being legitimized as a global commodity...
Catalyst No. 5 for Bitcoin Prices to Climb: CME Bitcoin Futures
By the end of the year, the world's leading commodity derivatives exchange is expected to allow trading of Bitcoin futures.
And the addition of Bitcoin futures by the Chicago Mercantile Exchange (CME) does two critical things for the cryptocurrency space.
First, CME futures legitimize Bitcoin as a global commodity that will trade alongside energy and currency derivatives.
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Second, Bitcoin futures will allow speculators to increase their positions in Bitcoin moving forward.
Catalyst No. 4 for Bitcoin Prices to Climb: Wall Street Trades Bitcoin
It's only a matter of time before a Wall Street bank jumps into the pool and trades Bitcoin.
Billionaire Mike Novogratz has predicted that the "institutionalization" of Bitcoin is pending.
Rumors continue to swirl that a firm like Goldman Sachs Group Inc. (NYSE: GS) may soon be the first to lead this transition.
Goldman - which makes a significant amount of its money on trading - has experienced a 40% decline in fixed income in the second quarter, leading some journalists to speculate that Goldman would look to exploit growing interest in Bitcoin trading.
We will likely see a top-tier U.S. bank initiate coverage of Bitcoin in 2018 and maintain a trading desk similar to what exists for other commodities.
If Goldman Sachs becomes that bank, it is likely that many other banks will follow suit.
Catalyst No. 3 for Bitcoin Prices to Climb: FOMO Reaches Main Street
The price of Bitcoin has surged more than 900% in 2017.
Part of the reason for the skyrocketing prices has been due to the stunning supply-and-demand metrics.
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As Moas explained to me in an interview, Bitcoin represents the largest supply-and-demand imbalance that he has witnessed in his lifetime.
The crypto exchange Coinbase announced that it had 100,000 new accounts added in 24 hours after CME Group announced plans for Bitcoin futures in early November.
With Bitcoin hovering at all-time levels and more aggressive price forecasts emerging each day, more investors may take the plunge in hoping to capture the upside.
"Fear of missing out" - a.k.a. "FOMO" - is a real element of behavioral economics, and it will continue to drive investors into assets like Bitcoin in the future.
Catalyst No. 2 for Bitcoin Prices to Climb: Fiat Currencies Erode Away
Inflation levels around the globe have pummeled the value of local currencies.
In Venezuela, a popular destination for Bitcoin mining, the nation's bolivar has lost 96% of its value against the U.S. dollar - this year alone.
In Zimbabwe, citizens are buying Bitcoin at an inflated level of roughly $15,000 to preserve any value of their assets.
In fact, Zimbabwe citizens are defying their new government leaders by purchasing Bitcoin at a time that it's ruled to be illegal. Some advocates argue that Bitcoin is a necessity in a country where the economy is collapsing.
Fading confidence in central banking schemes would continue to accelerate the popularity of cryptocurrencies.
And the next catalyst could be the biggest in sending Bitcoin prices above $14,000...
Catalyst No. 1 for Bitcoin Prices to Climb: No Hard Forks
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Some Bitcoin investors argue that the cryptocurrency has already topped $10,000 in 2017.
To reach this figure, they are adding the value of the two cryptocurrencies that spun off from Bitcoin this year: Bitcoin Cash and Bitcoin Gold.
On Nov. 24, Bitcoin sat at $8,280.93, Bitcoin Cash hit $1,685.26, and Bitcoin Gold hit $384.17.
Given that each Bitcoin has spun off one Bitcoin Gold coin and one Bitcoin Cash coin, a Bitcoin purchased before Aug. 1 would have generated $10,350 in value.
But for the purists, Bitcoin would need to remain intact, and developers would need to reduce the temptation to engage in additional forks in the future.
Should the Bitcoin community come together and prevent future forks, it will be bullish for Bitcoin prices in 2018.
The Bottom Line: Prominent Wall Street analysts and money managers have set bullish forecasts for the price of Bitcoin in 2018. A growing number of Bitcoin advocates foresee a Bitcoin price jump surpassing $10,000. For these gains to be realized, several bullish catalysts will need to drive the price higher.
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.