Bloomberg's analysis of cryptocurrency. Who sets the bar for the price and what arguments he invokes. The role of the crisis due to Covid-19, the March reef and historical comparisons.
The sound of the cell phone in the dark made the head of Goldman Sachs' Investment Strategy Office sweaty. Slightly disoriented, she touched the nightstand. She found her glasses, put them on, grabbed her smartphone and sat back on the bed. At such a time, an sms from the President of the company itself did not bode well for her.
Sharmin Mossavar-Rahmani didn't look like a romantic novelist at all. The black bags under the eyes were not due to a night of passion. She put both her hands on the base of her spine and stretched before opening the link to the Bloomberg report sent to her by the President. A difficult day had begun to dawn. This damn bitcoin doesn't say stop bothering her.
What does the report, which was shared exclusively with the agency's subscribers, say? We will no longer keep you in suspense. Bloomberg estimates that bitcoin will reach 20,000 in the next six months at the latest. To more than double its value by 2020. In particular, he finds it so unlikely that it will happen that the very first sentence of his analysis begins with the phrase: " Something Needs to Go Really Wrong for Bitcoin" to Not Appreciate).
The 11-page text, signed by Mike McGlone , head of Bloomberg Intelligence's commodity strategy, says that bitcoin stands out from cryptocurrencies, like gold in commodities, in contrast to the presentation of Goldman Sachs, which did not bother to single them out. .
The study lists 20 graphs to show why they remain optimistic about bitcoin and gold , given the current state of the economy, as they point out. Both had the best performance in 2020, something that is not expected to change any time soon.
Bitcoin is increasingly becoming a digital version of gold. They are the same forces that strengthen both. The unprecedented policies of relaxation of the Central Banks accelerate its maturation. As proof, they report that it showed the least variability it has ever shown, compared to the Nasdaq.
"2020 is particularly conducive to bitcoin and to a lesser extent cryptocurrency market, in our view." March was the key month , but he easily passed the big test. Bitcoin at 10,000 has been at about the same level as the Nasdaq since 2017.
If the story is our guide, Bitcoin will go to $ 20,000 even by 2020. Its behavior is reminiscent of the similar course it showed in 2016. That was the last time the halving phenomenon occurred, the study notes.
According to Bloomberg, Bitcoin falls into the category of commodities . In addition to its features, the main reason is that it was officially declared a commodity by the Commodity Futures Trading Commission. Unlike Goldman Sachs, which in its presentation considered it right to tell its customers that bitcoin is "not an asset class" .
So it makes sense to compare it to oil. Bitcoin not only had a lower volatility than crude oil, but also proved to be more valuable.
Is it possible to verify the Bloomberg Intelligence analysts' forecast? It is a fact that in its history, bitcoin has never enjoyed so much recognition. News agencies such as Bloomberg or legendary Wall Street investors, such as Paul Tudor Jones, have begun to understand this . This means that those who are in demand are aware of those who are never. Even the fact that it has started to be discussed at such a high level of investment planning means a lot.
According to the agency, progress in adoption is the main criterion for its evaluation and in this area all their indicators remain positive. At the same time, supply is steadily declining due to the halving effect that occurs every 4 years.
The increase in addresses is a clear indication that higher prices are expected for Bitcoin. At least that's what the historical data shows. The number of addresses has exceeded the top of 2019, when bitcoin has approached $ 14,000.
The news from the crypto market
* In the last month, data from the Useful Tulips analysis site show that bitcoin has changed hands in India more than ever. The relatively new Paxful exchange has surpassed the LocalBitcoins site in India.
* The Puell Multiple index , which indicates the revenue of miners, has reached a price level, which in the past had marked a sharp rise. The index examines market cycles in terms of miners' earnings. It is calculated by dividing the daily value of bitcoin issuance (expressed in dollars) by the moving average of 365 days of the daily issue value.
Obviously, it is unnecessary to mention the clarification again, but we repeat it for good: the indications from the past do not guarantee the direction of the future.
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