Bitcoin continues to attract more funds previously put in gold, bonds, and stocks, said Bloomberg in its latest crypto-related report. The paper forecasted $100,000 as the next possible price threshold while also outlining that BTC has begun the process of replacing gold as the hedge of choice.
The narrative that bitcoin, also referred to as digital gold by some, will or has already started to replace the precious metal has been widely discussed within the cryptocurrency community in the past year or so. The COVID-19-induced financial crisis and rebalancing of the financial industry poured more fuel into the digital fire.
Bloomberg strategists also reaffirmed this stance in their March Crypto Outlook paper. It reads that “the process of bitcoin replacing gold in portfolios is accelerating, and we see risks tilted toward more of the same.”
The document highlighted 2020 as BTC’s breakout year for institutional investors and corporations, as the cryptocurrency “gained legitimacy with declining volatility versus the opposite in most assets.”
The situation has also intensified in 2021 as “old-guard gold allocators” have focused on “prudent diversification.”
“Bitcoin inflows are accelerating, along with gold outflows, and we see scant reason to reverse the trend. The ratio of the price of the potential global digital-reserve asset vs. an ounce of the old-guard metal appears on a path toward 100x, after breaching 10x that held resistance since 2017.”
Previously, analysts from the US multinational investment giant JPMorgan indicated that the bullion’s price could suffer in the upcoming years as BTC continues to take substantial chunks of its market share.
The paper further explained that the primary cryptocurrency’s current state showcases that it has transitioned out of the realm of speculative risk assets into a “global digital store-of-value.” Moreover, its role will only intensify in the upcoming years, as the entire world is going digital.
Keeping in mind the skyrocketing demand from institutions, while the production of new coins decreases every four years, Bloomberg’s report predicted that the next price target could be the entrance to a six-digital territory – $100,000.
Additionally, the document touched upon Grayscale and its Grayscale Bitcoin Trust (GBTC). The GBTC premium dipped into negative territory in late February compared to net asset value (NAV), which, historically, has marked the bottom of many BTC corrections.
Consequently, the analysts believe that reaching $100,000 by the year’s end is not out of the question. Thus, they joined the Co-Founder of Magnetic, William Quigley, who envisioned even a price tag of $150,000 per coin in the next twelve months.
