Bloomberg analysts have said in a monthly report that there are least resistances on the higher side for Bitcoin (BTC). They have emphasized the point that in 2021, Bitcoin’s price could double from its current value.
In their monthly report, Bloomberg Crypto has noted:
“Bitcoin will maintain its propensity to advance in price into 2021, in our view, with macroeconomic, technical and demand vs. supply indicators supportive of $50,000 target resistance, implying about a $1 trillion market cap”
The demand-supply mechanics and fundamentals are favoring a bullish breakout. Per day Bitcoin mining has halved in the last 3-years. While 1,800 coins were mined in 2017, currently the number of mined bitcoin is 900.
They underscored the point:
“The 2017 advance followed a 2016 supply reduction to 1,800 coins a day, and similar occurred in 2012-13”
Bloomberg analysts say that the past data indicates a Bitcoin price rally to US$50,000. They also pointed out that the all-time record-high Bitcoin price was reached after nearly 7-months following the reward halving of May 11, 2020.
More importantly, institutional participation is increasing rapidly, which is a signal towards the mass adoption of Bitcoin. For example, Grayscale Bitcoin Trust’s assets under management have increased by 5-times within this year. At the beginning of 2020, the assets under management were US$2 billion, which has now increased to the US$10 billion levels. Reports say that Grayscale Bitcoin Trust has bought around 70% of the mined Bitcoins since its third reward halving on May 11, 2020.
Bitcoin futures on the Chicago Mercantile Exchange are also doing great. Open interest in the bitcoin futures has reportedly increased above US$1 billion in 2020. It was US$120 million in 2019.
Bloomberg analysts have said that these trends are expected to continue in 2021 also. They believe that they expect the governments across the world and the major central banks to continue their inflation-boosting stimulus programs. They have observed that the demands for both bitcoin and gold have increased significantly in 2020 YTD because of the unconventional policies adopted by authorities.
Bloomberg analysts say:
“The $10,000 mark has shifted to a critical support level after serving as the crypto’s resistance mark since 2017.”
They believe that US$10,000 has put itself firmly as strong support and the Bitcoin price will not fall below this level. Bloomberg analysts say that in the cryptocurrency market, the odds seem to be in favor of a bull run but the vulnerability of a March-like panic sell-off remains.