Bloomberg Analyst Estimates Bitcoin at $ 50,000 Due to Anti-Gold Sentiment
The current drop in the value of Bitcoin from the mark of more than $ 42,000, could hardly shake its bullish bias. According to the forecast of a Bloomberg analyst, the flagship cryptocurrency just took a breath, before a new ascent.
BTC dominates over traditional assets
In a report released on Wednesday, senior commodities strategist Mike McGlone wrote that the flagship cryptocurrency could grow to $ 50,000 in the coming periods. He called Bitcoin a means to carry $ 30 – $ 40k, noting that, in particular, $ 30K served as a reliable base for attracting institutional buyers.
“Around $ 30,000 is the frontier, supported by a growing wave of institutional buyers and worldwide recognition as a means of saving,” Mr. McGlone identified. “Our chart shows the milestone of a 20-week transition totaling over $ 20,000, which we view as a stage of excessive delay due to a risk drop close to 1Q20.”
As for what led institutional buyers to Bitcoin, McGlone cited “compelling evidence” confirming that funds entering the cryptocurrency markets are from gold.
Extremely low interest rates, a rising debt-to-GDP ratio, and global quantitative easing have had a strong impact on the value of Bitcoin. Thanks to the limited provision of just 21 million tokens, the cryptocurrency has caused a sharp jump in demand as a reliable asset.
The BTC is up 988% from its lowest level in mid-March at $3,858.
Meanwhile, ordinary buyers chose gold, the value of which further provided an inflated report in 2020, as opposed to concerns about inflation.
McGlone is known for the fact that it was thanks to his analytics and forecasting that Grayscale began to attract the attention of institutional buyers of the crypto market. The New York-based fund allowed buyers to draw attention to Bitcoin while avoiding the problems of buying, storing, and securely storing the crypto asset.
Capital flowed into Grayscale, while it saved on accumulating additional crypto assets to make its security choices again. Meanwhile, gold ETFs are skilfully withdrawing funds.
“Our research shows accelerating flows into Grayscale Bitcoin Belief (GBTC) as they don’t want to have fully identified gold ETF holdings,” McGlone noted. “With almost 700,000 BTC, GBTC is hitting record levels, while gold ETFs have fallen to around 107 million ounces since the October peak, just above 111 million.”
One extra zero to the Bitcoin valuation
The institutional adoption of Bitcoin tends to expand as its volatility falls to the level of various traditional markets corresponding to gold and stocks. Meanwhile, the expert said that the volatility of the cryptocurrency may even fall below the volatility of the precious metal, which will make it an additional attractive safe haven asset by 2025.
“The 260-day Bitcoin volatility is in the early days of bottoming out from a historical low, compared to an identical gold performance, akin to the beginning of 2017,” he added, stating that the cryptocurrency could add another zero compared to gold.
According to CoinMarketRate, the BTC is currently trading at $ 37,178.