Bloomberg report: Bitcoin is "pointing" at $50,000

Editor's Note: This article comes fromCarbon chain value (ID: cc-value), reprinted by Odaily with authorization.

Editor's Note: This article comes fromCarbon chain value (ID: cc-value), reprinted by Odaily with authorization.Content overview:Bitcoin could be a revolutionary asset during this unique period in history. Unless there is a major reversal in technical, fundamental, macroeconomic and micro trends, Bitcoin will likely continue to appreciate. According to Bloomberg Intelligence's analysis, Bitcoin's annual supply is expected to be about 2% in 2021, to drop to about 1% by 2024, and to about 0.5% by 2025.By Mike McGlone, Senior Commodity Strategist, BloombergCompilation: Carbon Chain Value Original Team1. Bitcoin will continue to rise on the basis of $20,000, and $50,000 may be the next stop of Bitcoin;

2. The volatility of Bitcoin decreases, and the price may "add a zero";

4. Will Bitcoin ETF be approved in 2021? Expect more QE to be rolled out, demand for Bitcoin will rise, and supply will continue to decrease.

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Bitcoin will continue to rise above $20,000, $50,000 may be the next stop for BitcoinBloomberg Intelligence believes that in 2021, Bitcoin will begin to "re-examine" the $20,000 price level, and it is likely to continue to maintain a bullish route. The price potential will continue to increase until it reaches $50,000, and its market value will also hit $1 trillion. As we’ve seen, Bitcoin’s digital gold attributes may be further enhanced as regulation matures compared to the other 8,000+ so-called cryptocurrencies, since most cryptocurrencies on the market are really just “someone or Organization's currency issuance project". Bitcoin is no longer a "junk coin" and has gradually become mainstream, although it is still in the early stages of price discovery. Compared with 2017, one of the biggest differences between Bitcoin today is that reputation risk has shifted, and Bitcoin has begun to be recognized by most people. "Black Swan" events.secondary titleBitcoin's next resistance level: $50,000Bitcoin price is skyrocketing, will it hit $50,000 in March 2021? At the beginning of 2021, Bitcoin seems to be still advancing along the price discovery mode. As long as there are no substantial negative "surprises", Bitcoin is expected to continue to rise above the $20,000 base. If you refer to the past experience of Bitcoin block reward halving, usually the price will rise within a year after "halving", testing the $50,000 resistance level will be a "moderate move", which seems reasonable, and the enthusiasm of institutional investors seems to be still rising.The $1 trillion market value of bitcoin will be the next "key resistance". According to estimates from Bloomberg Intelligence, as the market becomes more widely adopted, bitcoin may change from a "wave" to a "tsunami". The breakdown of the key resistance level of $50,000 has also been accelerated. In 2020, Bitcoin's block reward was halved, which is one of the reasons for the huge price increase. If we look at the past "Halving History", we find that:1. The price of Bitcoin rose 55 times in 2013;2. The price of Bitcoin rose 17 times in 2017.Unlike past bull markets, there are two obvious differences in the price rise of Bitcoin in 2021:

1. The maturity of Bitcoin is getting higher and higher;

As market demand and adoption increase, and supply continues to decrease, it is expected that the probability of Bitcoin price rising in 2021 will increase significantly.

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The advantage of Bitcoin is more obvious: In December 2020, the US Securities and Exchange Commission (SEC) formally sued Ripple Labs. Leading to a rise in Bitcoin dominance. More and more like gold, Bitcoin is becoming a "benchmark cryptocurrency" that is not "a digital currency issued by someone/project" and is being adopted organically around the world. There is no doubt that Bitcoin is gradually becoming "digital gold", and if we compare Bitcoin with the Bloomberg Galaxy Crypto Index (BGCI) index trend, we hardly see the possibility of reversing this upward trend, especially Bitcoin The peak of the early stages of price discovery has not yet been reached. (Bloomberg note: Ripple has been removed from the BGCI index.)

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Is Bitcoin Overheating Right Now? From the perspective of the market, the speed of the bull market expansion is indeed very fast. We find that Bitcoin is in the early stage of a new stage of the price discovery process. Double the previous peak and its 20-week moving average. If this rule is followed, at the beginning of 2021, the price of Bitcoin will also be about 2 times higher than the 20-week moving average price, so it is not surprising to exceed $20,000.

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Will Bitcoin Continue Its 2017 Trend?Bloomberg Intelligence suspects that there may be more time for a correction as Bitcoin may have entered a paradigm shift for mass adoption around the world.secondary titleBitcoin Dominance vs. StocksIn early 2021, Bitcoin’s measure of annual volatility hit its lowest level ever relative to the stock market, and if early patterns hold, Bitcoin’s dominance will last longer as Bitcoin’s supply and volatility keep falling .The performance may be better than the Dow Jones, and the price of Bitcoin may "add a zero." Relative to the stock market, Bitcoin has recovered from its lows, and if past cyclical patterns are repeated in 2021, it means that Bitcoin will perform better this year. As can be seen from the Bloomberg Intelligence analysis chart, compared with the trend of the Dow Jones price index, the annual volatility of Bitcoin has dropped to the lowest level.A reduced supply and reduced volatility give Bitcoin an edge. Bitcoin is recovering from yearly volatility nadirs relative to the S&P 500, and if historical data is any guide, the BTC/S&P 500 price ratio (with a lot of potential) could surpass the 2017 record 7 times peak.

1. In 2016, the low point of Bitcoin’s 260-day volatility was about 2.6 times relative to the S&P 500 index.

3. At the end of 2020, the annual volatility of Bitcoin is almost the same as that of the S&P 500 Index, which means that Bitcoin, as digital gold, is rapidly maturing.

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'Bitcoin/S&P 500' Price Ratio Breaks 2017 PeakIf volatility is an indicator direction, it is possible that Bitcoin price could continue its upward trajectory relative to stock prices.secondary titleDigital gold? Bitcoin could be betterBitcoin has risen more than gold. As market maturity picks up, the price of Bitcoin may be "added to zero" in 2025. After all, Bitcoin is still in "hangover mode" since the bull market in 2017. While it’s unknown which “catalyst” could drive Bitcoin’s price surge to new highs, the demand/supply metrics seem to be doing well. If Bitcoin follows its previous pattern of price increases, it is expected to reach $100,000 by 2025.

Money started flowing out of gold and into Bitcoin. The increasing flow of funds into Bitcoin on regulated cryptocurrency exchanges and the increase in outflows from the gold market on the other hand may point to the potential for a sustained increase in the price of Bitcoin. Bloomberg Intelligence analyzed the inflows of the Grayscale Bitcoin Trust (GBTC) and changes in total gold ETF holdings, among which:

2. Gold ETFs have been in decline since their peak in October 2020, from 111 million ounces to 107 million ounces.

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Investor Bitcoin Inflow - Gold OutflowIn U.S. dollars, the Grayscale Bitcoin Trust Fund has a market capitalization of just over $19 billion, while the gold ETF was worth about $220 billion on January 6, which means that the size of the Grayscale Bitcoin Trust Fund is about 10% of the gold ETF. At the beginning of 2020, the market value of the Grayscale Bitcoin Trust Fund was only equivalent to 1% of the size of the gold ETF. While there are other fund products on the market that track bitcoin, the Grayscale Bitcoin Trust is by far the largest and therefore the most representative.secondary titleWill a Bitcoin ETF be Approved in 2021? In fact, the market may see more quantitative easing policies, while stimulating a further increase in Bitcoin demand as the supply of Bitcoin gradually decreases. Bloomberg Intelligence believes that as the mainstream begins to adopt Bitcoin, the gradual decline in the supply of Bitcoin and the seemingly unstoppable quantitative easing policy on a global scale will provide strong support for Bitcoin in 2021. Grayscale Bitcoin Trust has become the first choice of many traditional investors, and the amount of funds flowing into it is also growing, including some large US exchange-traded funds.

High tide is coming? Bitcoin is maturing: Grayscale Bitcoin Trust premium drops. Large institutional investors are accumulating bitcoin at an accelerated pace, while the premium on the Grayscale Bitcoin Trust has begun to decline, both of which appear to be key indicators that bitcoin is becoming mainstream. Bloomberg Intelligence analyzed the lowest 200-day moving average of the Grayscale Bitcoin Trust premium, which is around 18%. As a single investment vehicle, the Grayscale Bitcoin Trust currently holds about 570,000 bitcoins and appears to be still “overweighting”, thus also providing support for the rise in bitcoin prices:

2. In 2020, the number of bitcoins held by the Grayscale Bitcoin Trust Fund accounts for about 3% of the total bitcoin mining.

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The Grayscale Bitcoin Trust, which provides traditional investors with a primary investment vehicle for exposure to Bitcoin, is a pioneer in U.S. exchange-traded funds and should increase market demand for Bitcoin.

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