On April 6, Bloomberg launched its April issue of Crypto Outlook, which highlighted bullish narratives around bitcoin and the thriving industry around it. The report was particularly optimistic, especially since it comes from a well-known company in the financial and media industry. Here are some of the highlights:
“Bitcoin meets the need for low-yield digital-active reserves in the world”
“The adoption iterations for Bitcoin have entered a unique state of human nature that supports the rise of crypto, in our opinion. Reluctant money managers to cross the Rubicon and allocate at least a small portion of the funds could be at risk, as Bitcoin simply does more of the same, advancing in price amid unprecedentedly low interest rates and high shares. ”
Record returns in the global economic environment have played a major role in the adoption of Bitcoin in the last year and more investors are starting to take note. Bloomberg also highlighted the dichotomy between bitcoin’s recent performance versus gold’s performance.
“Indicators indicate the growth of the Bitcoin-gold ratio”
“In addition to the maturation potential for the nascent Bitcoin, the crypto has a clear edge that should press its volatility towards gold – the Bitcoin offer is fixed. General adoption and higher prices increase in depth, which suppresses volatility and risk measures. ”
The report has repeatedly highlighted the superior properties of bitcoin and its suitability as a monetary asset in the digital economy, as opposed to gold. While the outlook for gold was not low for the metal itself, data and price action led Bloomberg to conclude that Bitcoin is replacing its monetary predecessor as the preferred sovereign reserve asset in investors’ portfolios.
“Bitcoin replacing Old-Guard gold is more sudden than gradual”
“The saying that money flows where it is treated best describes what we see as firm supports for the price of Bitcoin. It’s not necessarily bearish for gold, which returns in support layers below $ 1,700 an ounce, but most indicators show a changing global tide that favors digital birth currency as a reserve asset. ”
„Digital vs. Analog: Bitcoin’s Hand Hand ”
“Bitcoin’s relationship with gold is similar to 2016, when the metal hit just under $ 1,400 an ounce and the crypto launched to its peak in 2017. A key difference this time is that Bitcoin is growing in value and is less speculative. , supported by greater adoption. It was the largest carmaker in the world, by market capitalization (Tesla), which announced the diversification of part of its crypto wealth that allowed Bitcoin to break the $ 40,000 resistance. ”
The report also highlighted the chain analysis, which shows that the supply of bitcoin on the stock market continues to decline, despite the stock price action, which is the opposite of the trend observed during the 2017 bull cycle.
“Few signs of Bitcoin holders wanting to sell”
“Markets refer to buyers versus sellers, and Bitcoin risks being applied to an additional appreciation of the price, if the amount of crypto readily available for trading is a guide. Our chart shows the percentage of Bitcoin held on exchanges well below the 2020 peak, which marked an extreme sale. The models in this data set from Coinmetrics suggest that the price of Bitcoin will gain an increased risk of sellers dominating buyers when the amount of crypto held on the stock exchange exceeds the previous maximum value. That’s what happened around the high price in 2017. ”
Another notable highlight of the report was Bloomberg’s expectation that bitcoin was on a similar path to the 2013 and 2017 mining subsidy, halving bull cycles, indicating a price of $ 400,000 for the asset. The logarithmic, seemingly programmatic action of the bitcoin price over the years makes investors salivate in the current unprofitable economic environment.
“Bitcoin rhyme with 2013, ’17 reaches maximum $ 400,000”
“The technical outlook for Bitcoin in 2021 remains strong, if past patterns are repeated. The usual companions for strong annual rallies in crypto-born – low volatility and halves – are favorably aligned. Our chart describes Bitcoin on a similar field with gains of approximately 55x in 2013 and 15x in 2017. To reach price extremes similar to those years in 2021, the crypto will approach $ 400,000, based on the regression from the maximum since 2011. In September, the 180-day volatility of the crypto corresponded to the all-time low of October 2015. Since the average price in that month, Bitcoin has risen just over 50 times to its peak in 2017. ”