Bloomberg has forecast bitcoin to reach its record high of $20,000, and possibly $28,000, this year.
According to the company’s June Crypto Outlook report, “something has to really go wrong for bitcoin not to appreciate in value.”
Bloomberg points to quantitative easing and the coronavirus pandemic as the fuel behind bitcoin’s maturity, particularly when benchmarked against the falling stock market and crude oil. Both factors will cause the price of bitcoin (BTC) to rise.
“Covid-19 is hastening the shift away from paper money and stimulating plenty of quantitative easing, which is helping independent stores-of- value such as gold and bitcoin,” the report notes.
“Last year, the high was about $14,000, which would translate into almost double in 2020 if rotating within the recent band, and mean little in the big picture,” it added.
Bitcoin twice breached $10,000 since its supply cut event three weeks ago, but has struggled to stay above the key level, as investors quickly dumped the asset. It’s latest action involved a flash rally to $10,400 on June 1, followed by a 17% crash barely a day later.
The BTC price, up about 33% since the beginning of the year, is trading at $9,549 at Press time, down 0.5% over the last 24 hours.
Describing bitcoin as a “resting bull”, Bloomberg highlighted that increased institutional interest, the rising number of active BTC addresses, futures markets as well as mass adoption will lead the pioneering digital asset higher.
The report specifically mentions Grayscale Investment’s aggressive crypto acquisitions. Consuming 25% of all newly minted BTC in 2020, the Grayscale Bitcoin Trust Fund is by far the largest crypto-asset exchange-traded instrument, helping institutional adoption, it said. The Fund manages over 340,000 BTC, or $3.25 billion, on behalf of investors.
Active bitcoin addresses, which reached a two-year high of 891,000 this year, represent increasing adoption and that will help BTC stay above $10,000, Bloomberg opined. “Unless advancing addresses abruptly reverse, history indicates bitcoin has a propensity to appreciate,” it said.
The report notes that while futures open interest isn’t a large portion of total bitcoin supply, accounting for 50,000 BTC, “futures are significant as a primary gateway for the benchmark crypto to become a mainstream asset class.”
“Maturation, greater depth, and plenty more exposure via futures should continue to suppress the first-born crypto’s volatility, clearly keeping it tilted toward price appreciation,” Bloomberg observed.