Only 12% Of Deutsche Bank Clients See Bitcoin Over $100K Next Year

Bitcoin is the one asset everyone in 2020 is talking about whether they are for or against the cryptocurrency. Naysayers are out in full force, and supporters are stronger than ever and growing by the numbers – even enlisting celebrities, hedge fund managers, and more.

Top analysts from both crypto and traditional finance, along with the asset’s biggest believers, expect each of the rare coins to reach prices of as high as $400,000. But why then do only 12% of Deutsche Bank clients responding to a crypto-related survey see the price per BTC reaching $100,000 or more? Are these clients way off, or are the recent skeptics of the stock-to-flow model correct, and the cryptocurrency will vastly underperform against expectations?

Contrarian Investing: Will Too Early Of Euphoria Preemptively Kill The Current Crypto Bull run

Some of the greatest investors the world has ever known built their fortune on contrarian strategies. Warren Buffett was an advocate of being fearful while others are greedy, and vice versa. Baron Rothschild is credited with the “buy the blood in the streets” quote. And John Templeton warned that “bull markets are born on pessimism, grow on skepticism, mature on optimism, and die of euphoria.”

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Black Thursday in 2020 was about as pessimistic as things could get for Bitcoin, an asset that for the first time was threatened with crashing to zero. It took shutting off derivatives platform BitMEX’s liquidation engine to stop the cascade effect causing the collapse.

Related Reading | Why Investors Are Spending Stimulus Checks To Buy Bitcoin

As the asset recovered ahead of its halving, crypto investors remained skeptical given the sudden impact on the global economy the pandemic had. Throughout the rest of the year, talk of Bitcoin “maturing” into a respected financial asset became the norm thanks to the digital gold narrative and the asset’s outperforming every other traditional asset in a year when money is needed most.

But are predictions for $400,0000 and beyond a sign that the market is becoming euphoric and is at risk of momentum dying out as Templeton suggests could happen? And is that why the bulk of Deutsche Bank survey respondents don’t see the cryptocurrency reaching beyond $100,000 or more per BTC?

12% of Deutsche Bank Survey Respondents Beleive Bitcoin Will Breach $100,000 In 2021

With the leading cryptocurrency by market cap top of mind for much of the world of finance, whether they are believers or not, it has caused a wider range of criticism from experts outside of the crypto industry norm.

Rather than listening to Willy Woo or Charles Edwards – respected Bitcoin analysts – traditional finance pays closer attention to analysts from Wall Street focused outlets they know and trust.

Deutsche Bank clients were questioned as part of a recent survey regarding their thoughts about where Bitcoin might be one year from now. The asset’s price next year is currently a hot button topic with a bull market seemingly underway.

However, the price predictions provided by the respondents paint a far less bullish picture than most. The majority do agree Bitcoin will trade higher in 2021, ranging between $20,000 and $49,999. Under one-third of respondents aren’t sold, and think that Bitcoin will be below $20,000 in 2021.

Related Reading | Bitcoin Dominance In December: Why The Future Of Altcoins Hinge On This Month’s Close

But only the smallest subset of 12% think the cryptocurrency that is expected to change the world will reach over $100,000 next year. Are the majority wrong, not the right audience to ask, or is there something to the data?

Bitcoin is cyclical and appears to follow a four-year bubble pattern due to the asset’s hard-coded halving mechanism. But because there are so few cycles prior, there’s not much to conclude other than coincidental cyclical behavior exists.

But if the limited data is enough to get investors to subscribe to the four-year theory, then couldn’t the same data and the theory of “diminishing returns” also be conceivable?

bitcoin 100000 target deutsche bank survey

bitcoin 100000 target deutsche bank survey

According to Deutsche Bank survey respondents, this is it for Bitcoin in 2021 | BTCUSD on

Bitcoin has according to its chart been in two major bull markets, with the third potentially beginning now. From the 2013 bull breakout to the 2014 peak, the cryptocurrency provided a return of 8972%. Dividing that ROI by 4.61 results in roughly 1950% – the exact ROI of the 2016 bull breakout to the $20,000 top.

Reducing the 1950% by another 4.61 for the exact percentage of diminishing returns predicts an ROI of roughly 420% more upside between 2020 and 2021 and a target of around $100,000 per BTC.

If this is true, the current euphoria isn’t yet tapped out, but the bull run might not make it to such heights until the next try, or based on the law of diminishing returns, several cycles away.

Featured image from Deposit Photos, Charts from


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Hedge Fund Sharks Are Heading for Bitcoin Whale Waters

In brief

  • High risk hedge fund managers are heading for Bitcoin.
  • The asset’s high volatility is particularly attractive to hedge funds.
  • But quant hedge funds can bring systemic risk into Bitcoin’s fragile ecosystem.

It was a bonanza of a day for crypto markets. While the surge that took Bitcoin and the broader markets into the stratosphere happened yesterday, the gains were all sustained. 

At the time of writing, the world’s biggest market capped cryptocurrencies are all in the green. In fact, you’ll have to scroll all the way down to Theta Token at 38 to find a currency that has performed poorly in the last 24 hours, according to data provider Nomics. 

A good day for the markets. IMAGE: Nomics

Global market cap is now sitting pretty at $666 billion, and crypto as a percentage of gold is now above 9% for the first time this year. 

As we’ve been reporting on repeatedly in the last few weeks, the boom has been powered by a combination of the Federal Reserve’s unyielding support of the US economy – which has led to a weakening of the US dollar – and institutional investors’ use of Bitcoin and as a hedge against other market forces. 

But more recently, a new type of investor has started appearing in cryptocurrency’s waters: the hedge-fund sharks. These are a particularly unusual type of trader, and bring with them the potential for increased market volatility, as they use market movements to increase profits, at the expense of HODLers.  

Whereas the majority of day traders are betting their own money on being able to predict the price of Bitcoin, hedge-funds are different. Hedge fund managers are money managers for the rich. 

To be worthy of giving your money to a hedge fund, you need to have a net worth of $1 million (excluding your home) and earn roughly $300,000 a year – the amount varies according to where the investor is. 

Hedge fund managers then have autonomy over what they choose to invest in. Perhaps the most famous example was Michael Burry, the eccentric hedge fund manager played by Christian Bale in the 2015 movie The Big Short. 

Burry had complete control over investor money and bet a billion dollars on the housing market collapsing. In this instance he was right, but his investors went bananas because they had little power to stop him. 

If Burry ran a mutual fund, he would have been regulated by the Securities and Exchange Commission, would have had limitations on his investment strategies and would have to comply with rules and regulations over reporting what he was doing. Instead, he was free to dabble in no holds barred trading. And it’s characters like Burry that are heading for Bitcoin. 

These hedge fund managers are different from things like Grayscale’s Bitcoin Trust. The investment company has created a digital currency investment product that individual investors can buy and sell in their own brokerage accounts. It’s registered with the SEC, and it shares its reports with the Commission on a regular basis

Pure hedge-funds aren’t encumbered by such regulatory red-tape. Instead, they are considered a high-risk, high-reward investment vehicle not for the faint-hearted. During the 2008 financial crisis, hedge funds lost an accumulated $450 billion, far more than mutual funds, individual stocks, and balanced portfolios during the market collapse. Here’s why that’s interesting or concerning, depending on whom you ask, for Bitcoin. 

Sharks churn whale waters 

Bitcoin whales, those who hold at least 1,000 Bitcoin, according to Glassnode, buy Bitcoin, hodl it, wait for it to reach a certain threshold and then sell it.  

Hedge fund managers tend to thrive on volatility. A typical toolbox for a hedge fund trader includes things like long/short equities – where traders place long and short positions on competing assets – arbitrage – traders buy an asset in one market and sells it for more in another, global macro – big bets on prices based on macroeconomic trends – and the list goes on. 

Probably the most notable hedge-fund strategy for Bitcoin is quantitative analysis or QA. According to a May report from PricewaterhouseCoopers LLP and Elwood, the most common crypto hedge fund strategy is quantitative, accounting for about half of the $2 billion industry as of 2019. Indeed, JPMorgan Chase & Co. and Nomura Holdings Inc. reckon momentum-chasing robots have been a force driving the world’s largest digital currency in this record-breaking year.

These strategies build models using mathematical and statistical modelling to make assumptions based on where the price will go next. It’s currently one of the most popular ways day traders use to understand Bitcoin’s price. On the AAX Futures Exchange, you can see a whole host of chart-making tools that demonstrate this. 

Model making on AAX. IMAGE: AAX

Quants as they’re commonly referred to love Bitcoin because the price is based almost entirely on sentiment. Quants believe humans, in particular, traders behave in ways that can be modelled. For example, when stock markets tank, investors traditionally head for safe havens like gold, and the price of the precious metal goes up. That’s a model of human behaviour that quants make money out of. The same applies to Bitcoin.

Quants like whales because they tend to behave in a similar fashion, and they can make models that profit from that behaviour. What’s more, hedge-funds can cover their losses through hedging. Essentially the way it works is a hedge fund will try and run calculations on how much an asset swings by over a given period of time.

Invictus Capital for example studied Bitcoin’s price movements for two years, before building its Bitcoin Alpha Fund. With that data, it can then create fail-safes that protect investors from aggressive downward swings, creating a buffer. The downside is that those funds don’t benefit from the extreme market upswings as the buffer exists when the market goes up as well as down.

What this all means is that hedge funds with an appetite for risk can entice more investors into the crypto waters, with offers of bigger profits, and hedging against some of the risks. But with high profits comes high risk. Quants often use high-frequency trading (HFTs) to eek out those profits. But as we saw in 2008, HFTs can take a market downturn and turn it into a market collapse, as bots begin to copy each other. This cautionary tale was mapped out by Andrew Lo, a finance professor at the Massachusetts Institute of Technology

After the market collapse, he ran simulations of markets to explore how algorithmic trading strategies evolve. What he found was startling: the stability or instability of such a market depends on whether the strategies are highly diverse or dangerously similar. In essence, too many firms following similar practices could precipitate a market crash.

In two dramatic episodes during the second week of August 2007, several prominent and successful US hedge funds suddenly suffered enormous losses in a few hours because their quant bots were investing in similar ways to other quant bots. When one hedge fund had an unexpected margin call, it dumped its position to raise cash. That caused the asset to depreciate in value, lowering the net worth of the other funds, so they also faced margin calls and also had to sell the same assets. The result was a death spiral of selling and margin calls.

While we’re still in the early days of the hedge-fund quant sharks in Bitcoin, this could be a sign of things to come.

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Dear noobs, Bitcoin is NOT naturally going down. It is being pushed down via whales placing spoofy sell orders on exchanges to make noobs and risk managers sell to “buy back lower”. They are stealing your bags and will make you buy back at a higher price. Retweet this.

Dear noobs,
Bitcoin is NOT naturally going down. It is being pushed down via whales placing spoofy sell orders on exchanges to make noobs and risk managers sell to “buy back lower”. They are stealing your bags and will make you buy back at a higher price.

Retweet this.


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The trade of the century is still available. The next few hedge fund managers who take 100mil or greater Bitcoin position, will become the best investors of their generation. Similar to George Soros when he broke the pound. Bitcoin has 30x from here; that’s 100mil into 3 billion

The trade of the century is still available. The next few hedge fund managers who take 100mil or greater #Bitcoin position, will become the best investors of their generation. Similar to George Soros when he broke the pound. Bitcoin has 30x from here; that’s 100mil into 3 billion


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Bitcoin (BTC) $ 26,546.11 0.32%
Ethereum (ETH) $ 1,591.99 0.17%
Litecoin (LTC) $ 64.73 0.48%
Bitcoin Cash (BCH) $ 207.63 1.01%