Rajarshi Mitra
Independent Analyst
- A recent Bloomberg report predicts the price of Bitcoin to reach $20,000 this year.
- The report said that “something needs to go wrong for bitcoin to not appreciate.”
- Notably, Bloomberg’s take on Bitcoin doesn’t translate to other cryptos like Ethereum.
Bloomberg has recently said that the price of Bitcoin could hit $20,000 this year. This comes just a few days after Goldman Sachs published a report that outlined five reasons why investors should avoid Bitcoin. The leading crypto has so many technical and fundamental factors that "something needs to go really wrong for bitcoin to not appreciate," Bloomberg said. It added:
Bitcoin will approach the record high of about $20,000 this year, in our view, if it follows 2016's trend.
Bloomberg's research noted that Bitcoin’s maturation (fueled by the increasing acceptance of digital currencies and a steady decline in volatility) should keep it leaning toward price appreciation. The report also said that Bitcoin could be expected to appreciate if the stock market rolls over.
According to the report, Bitcoin is greatly benefiting from the COVID-19 pandemic. Firstly, the significant decline in equity markets caused by the virus didn't spill over to Bitcoin as a slight dip in crypto was "promptly rejected.” Secondly, the pandemic is accelerating the shift away from paper currency toward digital. Thirdly, the latest quantitative-easing policies from central banks around the world are "helping independent stores-of-value such as gold and bitcoin.”
Notably, Bloomberg’s take on Bitcoin doesn’t translate to all cryptos.
We see little upside in the ETH price absent a rising tide from bitcoin. [Bitcoin] is breaking away from the pack in terms of adoption and is supported by almost-ideal macroeconomic conditions for stores-of-value amid quantitative easing.
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