- Cryptocurrencies have had a volatile start to 2021.
- Greg King, CEO of Osprey Funds, shared with Business Insider why bitcoin and ethereum are positioned to double from December 31, 2020 levels.
Cryptocurrencies stole headlines on the first stock-market trading day of 2021, with bitcoin and ethereum selling off steeply after blistering run-ups over the weekend.
But investors need not worry about too sharp of a drop in the digital currencies, says Greg King, the CEO of Osprey Funds, which is in the process of developing a bitcoin trust similar to the one operated by Grayscale.
“As far as this little sell-off here, that seems a very natural thing and healthy thing after a big run-up to have a little bit of a sell-off and consolidation,” King told Business Insider on January 4. “That’s just how markets move.”
While King said he doesn’t have a near-term prediction for bitcoin’s price action, he said he disagrees with those calling for a dramatic decline to continue. He added that since bitcoin’s price has stayed above previous highs of $20,000 for at least a few days, it’s most recent upward swing was part of a larger move higher.
King said ethereum could drop to around $800-900 from its current levels of around $1,000 before continuing its upward trend.
And that upward trend - for both bitcoin and ethereum - has strong potential to be significant, King argues. He said he "would not be surprised if bitcoin and ethereum log triple-digit gains in 2021, as they did in 2020."
In other words, from December 31 levels, King sees the possibility of bitcoin and ethereum at least doubling in price by the end of this yeare
That would put bitcoin's price at more than $58,000, and Ethereum at roughly $1,486 before 2022.
King's outlook on the two cryptocurrencies has proven accurate since Business Insider spoke with him on November 18. During that interview, King said bitcoin still had "a long way to go," and that Ethereum is "here to stay" and is the cryptocurrency he's most bullish on outside of bitcoin.
Since then, bitcoin has risen more than 75% and Ethereum well over 100%.
On Monday, King said his bullish views on the digital currencies had only strengthened.
One reason for this is their continued adoption, with publicly traded companies and institutional investors increasingly putting their money into them - especially bitcoin.
Another is the increasing likelihood of inflation ahead following fiscal and monetary stimulus efforts to aid the economic recovery, King said.
"It seems even more clear that we have an environment of easy money, so the inflationary pressures are increasing, or are at least being sustained," he said. "Since a few months ago, that's just been more reinforced I think with what's gone on in the government and Congress and the solutions that are being proposed for dealing with the financial ramifications of the pandemic."
Further, there's simply momentum.
"I think there's enough critical mass there to say that it's the leader and it's already successful and going to continue to be more successful," King said of ethereum, noting that it has yet to cross its previous all-time-high, like bitcoin has done, of around $1,400. "I certainly think there's a lot of room for ethereum to the upside."
