Bitcoin may be up over 100 percent since the $3,700 lows seen in March, but the cryptocurrency remains far below its all-time high of $20,000 — established in December 2017 at the peak of the last market bubble.
With BTC’s price currently at $8,800, a move to all-time highs seems unlikely, especially considering the uncertainty around COVID-19 , but a prominent Wall Street veteran is certain that Bitcoin will rally to $20,000 this year.
Why a Wall Street veteran thinks Bitcoin will hit $20,000 this year
Speaking to CNN on May 12, Michael Novogratz , a former partner at Goldman Sachs, backed his prediction by citing the current macroeconomic environment, which is favoring the growth of an asset growing increasingly scarce like BTC, which just underwent its third halving .
The Galaxy Digital chief executive said:
“We have quantitive easing over quantitative easing all over the world, not just in the U.S. […] On the flip side, Bitcoin’s halving is basically ‘quantitative tightening’. So you have this exclamation point on the story of a scarce asset.”
— Julia Chatterley (@jchatterleyCNN) May 12, 2020
Novogratz continued by remarking that it’s “perfect timing” with the world’s central banks debasing their cryptocurrencies while the Bitcoin supply that comes to be sold at market decreases.
No wonder investors are starting to allocate 1-2 percent of their portfolio to BTC, the investor added, referencing the surprising news that legendary hedge fund investor Paul Tudor Jones has started to allocate portions of his personal wealth and professional fund to the cryptocurrency.
As aforementioned, his analysis of these factors in confluence provided him with the sentiment that Bitcoin is still on track to hit $20,000 by year-end.
This forecast has been echoed by other players.
“Bitcoin may set new highs in the next 12 months. But not overnight. Institutions may take 2-3 months to triage current portfolio issues. 3-6 to research opportunities like distressed debt, crypto, etc. Then, as they begin making allocations, those markets will begin to rise.”
$20,000 could be followed by $50,000
Bitcoin hitting $20,000 from her would already be deemed a great accomplishment by analysts, but the cryptocurrency breaching milestone could be followed by a move to $50,000.
This comment was seemingly made in reference to the idea of reflexivity in financial markets — which effectively states that a rally begets a bigger rally and vice-versa.
In the case of cryptocurrency, $20,000 is purportedly the part of the rally at which prospective BTC investors will enter the space and where existing holders will double down, creating that pressure to squeeze prices even higher.
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