On April 6, Bloomberg published the April issue of its monthly “Crypto Outlook,” which outlined bullish narratives around Bitcoin and the expanding industry around it. The report was particularly bullish, mainly because it came from a reputable former company in the financial and media industry. Here are some of the highlights:
“Bitcoin meets the need for digital backup resources in a low-performing world”
“Bitcoin adoption iterations have entered a unique state of human nature that supports the rise of the crypt, in our view. Money managers reluctant to cross the Rubicon and allocate at least a small portion of the funds can to be at risk, as Bitcoin simply does more of the same, advancing in price amid unprecedented low interest rates and high equities ”.
Record low returns in the global economic environment have played a major role in the adoption of Bitcoin over the past year and more investors are starting to take note. Bloomberg also highlighted the dichotomy between recent bitcoin performance and gold performance.
“Indicators point to an increase in the Bitcoin-Gold ratio”
“In addition to great maturing potential for nascent Bitcoin, cryptography has a clear advantage that should put even more pressure on its volatility compared to gold: the supply of Bitcoin is fixed. Widespread adoption and higher prices increase depth, which eliminates volatility and risk measures ”.
The report repeatedly highlighted the superior properties of bitcoin and its fit as a monetary asset in the digital economy in contrast to gold. While the outlook for gold was not low for the metal itself, data and price action have led Bloomberg to conclude that Bitcoin is replacing its monetary predecessor as the preferred non-sovereign reserve asset in the portfolio. ‘investors.
“Bitcoin replacing old-guard gold is more sudden than gradual”
“The claim that money flows where it’s best describes what we see as a firm foundation for the price of Bitcoin. It’s not necessarily bearish for gold, which is falling back into support layers below $ 1,700 an ounce. , but most indicators show a changing global tide that favors the nascent digital currency as a reserve asset. ”
“Digital vs. Analog: the hand of Bitcoin “
“Bitcoin’s relationship with gold is similar to that of 2016, when the metal peaked below $ 1,400 an ounce and cryptography was launched towards the peak of 2017. A key difference this time is that Bitcoin is rising in value and is less speculative, driven by higher adoption. It was the world’s largest market maker (Tesla) that announced the diversification of some of its own resources into crypto that allowed Bitcoin to break the $ 40,000 resistance. ”
The report also highlighted the chain analytics that show that the supply of bitcoins in exchanges continues to decline, despite the upward action of prices, which is the opposite of the trend observed during the upward cycle of 2017.
“Few signs of Bitcoin holders wanting to sell”
“Markets are about buyers and sellers, and Bitcoin risk leans toward greater price appreciation, if the amount of cryptography readily available for trading is a guide. Our chart shows the percentage of Bitcoin held in stock markets well below the peak from 2020, which marked a sell-off. Patterns in this Coinmetrics dataset suggest that the price of Bitcoin will gain a high risk of sellers dominating buyers when the amount of cryptocurrency on the stock exchanges exceeds the previous maximum. This happened around the high price in 2017 ”.
Another highlight of the report was Bloomberg’s expectation that Bitcoin was following a path similar to that of the 2013 and 2017 mining subsidy which halved stock market cycles, signaling a price of $ 400,000. dollars for the asset. The logarithmic, seemingly programmatic action of Bitcoin prices over the years causes investors to survive in today’s unprofitable economic environment.
“Bitcoin rhymes with 2013, in ’17 reaches $ 400,000”
“Bitcoin’s technical outlook for 2021 remains strongly on the rise, if past patterns are repeated. The usual companions of strong annual concentrations on the first-born crypto (low volatility and halving) are aligned favorably. represents Bitcoin on similar ground to the increase of approximately 55 times in 2013 and 15 times in 2017. To reach extreme prices similar to those years in 2021, cryptography would approach $ 400,000, depending on the regression from the maximum 2011. In September, the 180-day volatility in cryptocurrencies coincided with an all-time low compared to October 2015. Starting this month’s average price, Bitcoin rose a little more than 50 times to the maximum of 2017 “.