Alex Thorne, head of research at Galaxy Digital, said there was much more optimism around Bitcoin at the beginning of the year, but it may not be long before the cryptocurrency regains the same level of hype.
“Bitcoin is going to be in the spotlight again, it always has been,” Thorne said in an interview with CNBC on Friday, stressing that “at the beginning of the year, Bitcoin was the hottest transaction of the year” following Donald Trump’s victory in the US presidential election.
“For everyone around the world and for all types of asset classes…that will not be the case for the rest of the year.”
Investor attention is diverted to other areas
Thorne said investors are focusing on areas such as AI, nuclear power, quantum technology and gold. “There were so many other places to take profits this year, which hindered my allocation to Bitcoin,” he said.
“We are entering a much more mature era where distribution from old to new is incredibly healthy for the distribution of Bitcoin ownership,” Thorne added.
While Thorne remains bullish on Bitcoin (BTC) over the long term, he lowered his year-end price target for Galaxy Digital from $185,000 to $120,000. According to CoinMarketCap, a rise to $120,000 would represent an increase of about 17% from Bitcoin’s current price of $102,080.
Bitcoin has fallen 15.72% in the past 30 days. sauce: coin market cap
Many of the sectors that Thorne said are drawing investors’ attention away from Bitcoin, particularly gold, are the same sectors to which Bitcoin is often compared.
Analysts at JPMorgan recently said that the rise in gold’s volatility during October’s rally to all-time highs has made the precious metal more risky, making Bitcoin “more attractive to investors,” given that the Bitcoin-to-gold volatility ratio has fallen to 1.8, meaning Bitcoin is 1.8 times more risky than gold.
Quantum computing continues to divide the Bitcoin industry
When it comes to AI, it was reported on October 10 that Bitcoin and Nvidia stock (NVDA) are moving more in sync than at any point in the past year. As a result, some market participants are concerned that a crash similar to the dot-com bubble of the late 1990s is looming.
Meanwhile, the debate over quantum computing’s potential threat to Bitcoin continues to divide experts. Borderless Capital’s Amit Mehra recently said that quantum computing is still years away from threatening Bitcoin.
Meanwhile, Charles Edwards, founder of quantitative Bitcoin and digital asset fund Capriol, said the situation was far more urgent, arguing that the industry needed to introduce solutions as soon as possible before it was too late.