Bitcoin has soared so far this year, climbing to a price of around $60,000 and helping the broader cryptocurrency market hit an eye-watering $2 trillion.
The bitcoin price has soared by around 400% since its latest bull run began as long-awaited institutional adoption started to materialize and Tesla billionaire Elon Musk whipped the crypto market into a frenzy.
Now, with many bitcoin and crypto analysts trying to call where the market top will be, a Bloomberg analyst has predicted the bitcoin price could hit $400,000 this year—even as Musk seems more interested in “joke” bitcoin rival dogecoin.
“The technical outlook for Bitcoin in 2021 remains strongly upward, if past patterns repeat,” Mike McGlone, a senior commodity strategist at Bloomberg Intelligence, wrote in his April market report, arguing bitcoin is “on similar ground as the roughly 55x gain in 2013 and 15x in 2017.”
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“To reach price extremes akin to those years in 2021, the crypto would approach $400,000, based on the regression since the 2011 high. In September, 180-day volatility on the crypto about matched the all-time low from October 2015. From that month’s average price, bitcoin increased a little over 50x to the peak in 2017.”
The bitcoin price has already doubled in the first three months of 2021, climbing from just under $30,000. Bitcoin’s blistering rally has made it a $1 trillion asset and catapulted it toward mainstream adoption.
According to McGlone, 2021 could “rhyme” with 2017 and 2013 because they all follow years that bitcoin’s supply was reduced by a so-called halving, when the reward received by that those that secure the bitcoin network was halved.
“The year after a supply cut (halving) is what 2021 has in common with 2017 and 2013, along with subdued volatility. Initial support is around the 2021 average price of $44,000 to March 25.”
Meanwhile, Tesla’s recent $1.5 billion bitcoin buy could be an “inflection point” for bitcoin, triggering a shift to “risk-off.”
“Rising equity riches partially diversifying into bitcoin is logical, in our view,” wrote McGlone.
This is backed up by a survey out this week that found institutional investors and wealth managers expect to see an increase in companies adding bitcoin to their treasury reserves.
Over the next two years, 81% of the investors and managers surveyed expect to see an increase in corporations using bitcoin for their treasury reserves, the survey commissioned by Nickel Digital Asset Management found.
“A growing number of corporations, including car manufacturer Tesla, business intelligence firm MicroStrategy, and mobile payments processor Square have recently made non-trivial, multi-billion allocations to bitcoin as part of their treasury reserve strategies,” said Nickel Digital Asset Management chief executive Anatoly Crachilov said in a statement alongside the research.
“This, coupled with announced structural allocations to crypto assets by the leading global asset managers, including Paul Tudor Jones, Bill Miller, Ruffer, and Guggenheim Partners is a huge endorsement for the bitcoin emerging store of value functionality.”