By Landon Manning

Bloomberg, the Manhattan-based titan of media and financial services, published a report this month claiming that bitcoin’s price will spike sharply by the end of the year.

The company has been publishing a monthly edition of a “Crypto Outlook” report for some time now, covering a series of developments in the wider world of cryptocurrency that might be of interest to the financial sector. The April edition of “Crypto Outlook” was published on April 6, claiming that the “rising tide” of bitcoin adoption is foretelling a bullish phase of growth for the world’s number-one decentralized digital currency.

Specifically, the report made the bombastic claim that bitcoin will reach a price of $400,000 by the end of Q4 2021, basing this claim on several data points. First of all, the analysts have come to this figure through a series of calculations on bitcoin’s history, tracking its overall tendency for value to increase next to other factors like liquidity, volatility, number of bitcoin mining subsidy halvings and more. Although Bloomberg has quite sophisticated data analysis under its umbrella that back up bold declarations like this, there are also a number of broader factors that could lead to this price bump in 2021.

For one thing, the COVID-19 pandemic has done quite a number on a wide range of more traditional assets. The report claims that “Money managers reluctant to cross the Rubicon and allocate at least a small portion of funds may be at risk as Bitcoin simply does more of the same, advancing in price amid unprecedented low interest rates and elevated equities.”

In other words, bitcoin’s continued growth despite a floundering economy has left it one of the only places that larger institutional investors can safely park large amounts of money, and ensure that it accrues value. This confidence is bolstered by the fact that Bloomberg analysts claim that the proportion of HODLers who wish to sell is much lower than usual, as people hold on to their coins. 

Powered by more than just corporate investment, however, the heft of Bloomberg’s argument rests in the belief that bitcoin is showing off its use case as a durable store of value to a wider and wider group of people. Instead of trying to puff up promising figures of long-term growth, this “Crypto Outlook” looked at some hard data, comparing bitcoin as a store of value in comparison to the status of time-honored gold. And gold is looking all the worse for it.

Confident enough in this position to continue publishing coverage of it days after the release of the April “Crypto Outlook,” Bloomberg is claiming that bitcoin’s runaway success is causing it to practically replace gold as a sought-after store of value much quicker than anticipated. Gold and Treasury bonds have been lagging, even before the doldrums of the COVID-19 pandemic, with these two assets displaying strong correlation through history. But bitcoin thrives on fiat instability. 

All of these figures, however, amount only to speculation. Nevertheless, bitcoin is currently enjoying a prolonged period of triumphant success, weathering several downturns and kerfluffles that were claimed to be the first domino to bring pandemic prices of the asset tumbling down. Instead, however, it’s been skyrocketing all the higher for it. 

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Source link

#Bullish #Bitcoin #Bloomberg #Predicts #Price Click To Tweet