Crypto analysts at Bloomberg have gone super-bull on Bitcoin, suggesting a $400,000 valuation isn’t out of the question – this year. The view comes from their April Crypto Outlook 2021 edition and claims the digital token may occupy valuation territory similar to its 2013 position.
Bloomberg cited the decision by Tesla to invest in Bitcoin – it went public in February with $1.5bn (£1.1bn, €1.3bn) – as well as allowing payment in Bitcoin for some of its products, as proof of growing institutional acceptance. Tesla said the investment gave “flexibility to further diversify and maximize returns on our cash.”
Global digital store of bitcoin value
The Bloomberg analysts aren’t alone with their uber-optimism. In March analysts at Los Angeles-based investment management company Wave Financial echoed a highly supportive prediction based on an analysis stock-to-flow ratio, similar to that used with gold valuation models.
A $55,000 prediction seemed relatively outlandish in March 2019, said the company. “But today $55,000 seems like a reasonable target for 2021. The target price of $400,000, once again, seems outlandish today.”
On Wednesday, billionaire investor Peter Thiel, the co-founder of PayPay, suggested that the cryptocurrency could be weaponised by the Chinese to challenge the dollar as the global reserve standard. Bitcoin has some attributes of gold – limited supply, for example.
In late March, Mike McGlone, senior commodities strategist at Bloomberg Intelligence tweeted that Bitcoin was on the “way to becoming a global digital reserve asset, a maturation leap in 2021 may be transitioning Bitcoin toward a risk-off asset, in our view”.
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