Bloomberg analyst Mike McGlone says that all signs point to Bitcoin going on the major bull run in 2020.
“History indicates bitcoin toward $20,000 in 2020. Bitcoin is mirroring the 2016 return to its previous peak. That was the last time supply was halved, and the third year after a significant peak. Our graphic depicts Bitcoin marking time for a third year following the parabolic 2017 rally. After 2014’s 60% decline, by the end of 2016 the crypto about matched the 2013 peak. Fast forward four years and the second year after the almost 75% decline in 2018, Bitcoin will approach the record high of about $20,000 this year, in our view, if it follows 2016’s trend,” noted noted Bloomberg Crypto Outlook in a monthly report.
The report suggests that COVID-19 has accelerated Bitcoin’s maturation as an asset, showing its strength amid declining equities. In addition, it points to the ever-increasing appetite from institutional investors, and Grayscale (GBTC) in particular, which has been consuming about 25% of the the new supply: “So far this year, its increasing AUM has consumed about 25% of new Bitcoin-mined coins vs. less than 10% in 2019. Our graphic depicts the rapidly rising 30-day average of GBTC AUM near 340,000 in Bitcoin equivalents, about 2% of total supply. About two years ago, it accounted for 1%.”
Put simply, demand looks to be outstripping supply and that is a classic factor driving price rises, regardless of the asset. Additionally, the unprecedented monetary and fiscal stimulus lifelines launched by central banks and governments across the globe to counter the coronavirus-induced economic crisis and joblessness is widely expected to push up inflation, leading to a further increase in demand for bitcoin.
But Bloomberg’s bullish view on bitcoin doesn’t translate to other cryptocurrencies like ether.
“We see little upside in the ETH price absent a rising tide from bitcoin,” Bloomberg said, adding that bitcoin “is breaking away from the pack in terms of adoption and is supported by almost-ideal macroeconomic conditions for stores-of-value amid quantitative easing.”