Despite the fact that Bitcoin prices have cooled in recent days, with the major cryptocurrency currently hovering around the $ 32,000 mark, it still exhibits strong technicalities as well as thirty day price gains of almost 40%. Not only that, but even since its recent dip – which has seen the digital asset fall from its all-time high of about $ 42,000 to its current value – the highest crypto is still in the greens over the past 12 months, displaying a spike worth nearly 300%.
In this regard, since the fourth quarter of 2019, many traditional finance players have been anticipating big things for Bitcoin (BTC), especially as governments around the world continue to print money in the form of “economic stimulus packages,” by lead to fears of inflation becoming more prevalent but also of an impending economic disaster that could potentially lead to a global recession of unprecedented proportions.
For example, in the second quarter of 2020, the US economy plummeted at an unprecedented rate, with the global powerhouse’s gross domestic product, outlining a nation’s total output of goods and services, falling 31.4%.
As a result of such developments – including an alarming rate of money being printed by central banks globally – many investment houses and banking institutions are now beginning to see a future for Bitcoin, especially as a hedge against financial inflation , despite its current levels of volatility.
Many organizations see BTC at $ 100,000 plus
Earlier this year, JPMorgan Chase’s American megabank strategy team, led by Nikolaos Panigirtzoglou, claimed that a theoretical $ 146,000-plus target could be sustainable for BTC by the end of 2021, pushing the narrative that digital currency seems to be a prime candidate for its replacement of gold as a long-term value store, especially for a vibrant base of younger, more tech-savvy investors.
In a similar vein, new data released by Pantera Capital, an investment and hedge fund firm, reiterates JPMorgan’s sentiments about BTC, suggesting that its price action closely follows the Stock-to-Flow model, and thus reaffirms its faith in the digital asset hit the $ 115,000 mark by Aug. 1.
The S2F model developed by PlanB looks at BTC halving events that take place roughly every four years and how they play a direct role in triggering the value of the currency about six months after each cycle. In this regard, one can see that Bitcoin has shown remarkable growth following each of the previous three halves. For example, after halving May 2020, the price of 1 BTC rested at $ 8,000, only to shoot past the $ 15,000 threshold after exactly six months.
Raiffeisen Bank also employed the S2F model in a recent report to find out where Bitcoin might be headed in the near future. According to the company’s research team, price targets beyond the $ 100,000 or even $ 1 million mark could be achievable. “The reality is that now that the value has more than tripled in 2020 and momentum remains strong, further future gains should not surprise us,” the study reads.
Other prominent traditional finance players who have projected big things for BTC in the short term include individuals such as Andy Yee, Greater China’s director of public policy at cross-border payments provider Visa, who believes that this rally is different from the one in 2017, as it marks a move of highly speculative, non-executive tokens towards Bitcoin and Ether (ETH).
Similarly, Thomas Fitzpatrick, global head of US-based CitiFX Technicals Citibank market insight product, allegedly wrote in a private report – leaked online – that by December, Bitcoin has the potential to scale up to a price of approximately $ 318,000.
Fancy projections or upcoming reality?
While the S2F model was initially one of the few technical indicators that signal Bitcoin’s astronomical rise, it now appears that an increasing number of experts and analysts are beginning to see the technological and financial proposition presented by BTC and other cryptocurrencies.
Sam Tabar, co-founder of Fluidity – the company behind the AirSwap trading platform – and former head of the capital strategy for Merrill Lynch told Cointelegraph that everyone needs to remember that optimism around BTC is not just fluff on this moment, as there is speculation now. supplemented by a real substance, adding:
“Bitcoin is not controlled by any one person or government. Instead, it is governed by the simple laws of supply and demand. […] Bitcoin is basically two sides of the same coin: On one side is global currency, and then the other side is digital gold. ”
As a proxy for global currencies, the friction of buying crypto has been significantly reduced, as it is easier than ever before to acquire Bitcoin. Similarly, as a proxy for gold, Tabar decided that Bitcoin be used as a hedge against the US dollar, especially as newly elected President Joe Biden seeks to spur US dollar spending in support of economy against the effects of COVID- 19 locks.
Providing a more technical analysis as to why organizations are betting heavily on Bitcoin, JP Thieriot, CEO of asset trading platform Uphold, told Cointelegraph that unlike traditional dollar spoiler havens like gold and other commodities, Bitcoin has no zero elasticity on the supply side.
He highlighted that if / when the price of gold reaches $ 3,000, peripheral gold mines will fire up again, with the same dynamic applying to oil and all other non-math-based units of account. Thieriot believes that “The lack of a unique supply-side elasticity means that BTC, price-wise, will respond more prudently than things like gold, to exactly the same drivers.” He further added:
“BTC is in the early stages of roll out. Since it metamorphoses from marginal curiosity into a vital portfolio, it is quite logical to assume that inflows will grow. If I were a booker, I’d say the over / under for Dec. 31, 2021 midnight … is $ 85,000. “
Finally, ever-increasing institutional demand appears to be changing the digital asset market, which in turn is driving many banks to make seemingly rural price projections relative to BTC. For example, more money is now looking to get into the crypto game, and the American company Ospreys Funds recently announced that it will launch its over-the-counter crypto solution, Osprey Bitcoin Trust, which will likely compete in Grayscale Bitcoin Trust.
Investor sentiment around BTC is high
Looking at the feel of the market around Bitcoin, the digital currency is increasingly showing a correlation with the core functions traditionally given by traditional fiat currency to its users – that is, it has become a unit of account, an the standard of deferred payments and, finally, a tangible long-term value store.
Also, during 2020, a growing number of e-commerce platforms added support for Bitcoin and other cryptocurrencies as a method of transactions to pay for goods and services. PayPal, for example – a company with a 28 million merchant base – now allows consumers to buy, sell and store cryptocurrencies through its platform.
On the subject, Paolo Ardoino, Bitfinex’s chief crypto exchange technology officer, told Cointelegraph that consumer sentiment around Bitcoin is extremely bullish right now and that people celebrating the rise of various altcoins and other off-chain solutions are indebted to their success to the forefront. crypto, adding:
“The king of crypto is the foundation layer for an emerging alternative financial system. Bitcoin provides a solid foundation for an astonishing array of projects, some of which will fundamentally change the nature of money by the end of the decade. ”
Thieriot believes that the sentiment driving BTC is a result of unprecedented levels of currency failure generated by the financial response to COVID-19. Beyond retail speculation, he believes corporations are looking to hedge their fiat exposure, clearly seeing some of Bitcoin’s relative advantages over traditional havens like gold and have jumped in after that. “The early sweaters have been handsomely rewarded, so the trend is likely to continue, He added.
Finally, Tabar highlighted that one of the more recent signs of increased consumer sentiment and institutional acceptance about BTC came in the form of a recent filing made by BlackRock, an American multinational investment management corporation with $ 8.7 trillion in assets under management at the end of 2020. A quick look at the filing demonstrates a strong use of crypto-focused language with reference to the company’s funds that could participate in “Bitcoin-based futures contracts.”