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Bloomberg Report: COVID Stock Market Shake-Out Accelerating Bitcoin Maturation Into Digital Gold

A new report from international news agency Bloomberg indicates that the COVID pandemic’s shake-out of the stock market may be accelerating Bitcoin’s maturation into a new kind of digital gold.

According to the April 2020 Bloomberg Crypto Outlook entitled Bitcoin Maturation Leap, the stock market’s volatility instigated by the coronavirus disruption has shaken up the entire crypto market and may have greatly accelerated Bitcoin’s transformation into a safe haven asset like Gold.

Per the report, “This year marks a key test for Bitcoin’s transition toward a quasi-currency like gold, and we expect it to pass.”

Source: Bloomberg Crypto Outlook:Bitcoin Accelerating Maturation

Although Bitcoin did lose almost 30% during the intense economic downturn in March, according to the researchers it only lost 6% in terms of its annualized basis. Analysing the increase of interest in option futures contracts and a remarkable decrease in volatility the report read, “Bitcoin is maturing from a speculative asset toward a digital version of gold.”

Bitcoin Accelerating into a Safe Haven

The research states that Bitcoin is becoming less of a risk-on asset and the researcher’s believe that Bitcoin’s price plunge will prove temporary.

Source: Bloomberg Crypto Outlook:Bitcoin Accelerating Maturation

The researcher’s explained, “When the S&P 500 declined almost 14% in 4Q18, Bitcoin declined about 45%, and both bottomed about the same time. Indicating the first-born crypto is still susceptible to the receding stock-market tide, but in more of a bullish divergent condition, Bitcoin remains up about 9% in 2020 and is hovering near its $8,000 support level, despite about a 20% S&P 500 correction. Our graphic depicts the spiking nature of the correlation between Bitcoin and the S&P 500, notably when equities decline swiftly.”

Noting Bitcoin’s on-chain indicators are remaining price supportive, the report reveals that the coronavirus appears to be accelerating Bitcoin’s performance much more than the broader cryptocurrency market.

With the upcoming Bitcoin halving the researchers believe good news is on the way, stating, “Cutting the supply in half in May will provide another price tailwind in our view.”

Billionaire Paul Tudor Jones Looks to Buy Bitcoin as A Portfolio Hedge Against Inflation – Here's Why

According to a Bloomberg report, billionaire hedge fund manager Paul Tudor Jones is buying Bitcoin to hedge against inflation as central banks across the world print money to relieve economies affected by coronavirus pandemic.

Jones is one of Wall Street’s most seasoned and successful hedge fund managers. He is the CEO and founder of Tudor Investment Corp, which is a hedge fund company that managed $8.4 billion as of March 30, based on data from the SEC (Securities and Exchange Commission).

Looking to insulate assets from the market downturn

In a market outlook note, Jones told his clients that he thinks Bitcoin will serve as a potential hedge against a rise in inflation he believes is coming because of central banks sharply expanding their balance sheets and printing money amid the COVID-19 epidemic.

According to the report, Jones compared Bitcoin to gold by saying that the leading cryptocurrency reminds him of the role that gold played in the 1970s.

In the client note, Jones said, “The best profit-maximizing strategy is to own the fastest horse. If I am forced to forecast, my bet is it will be Bitcoin.”

The hedge fund manager commented that one of his funds, Tudor BVI, holds a low single-digit percentage of its assets in Bitcoin futures to assist in protecting against an increase in inflation. Bitcoin (BTC) traded up more by 6.5% to $9,911 on Thursday.

Interest in Bitcoin has increased amid trillion-dollar rescue packages from central banks around the globe as nations seek to improve economies, which are experiencing tremendous GDP contraction because of the coronavirus outbreak.

Jones has achieved legendary status on Wall Street after making the correct prediction of the 1987 economic crash and correctly predicted shorting Japanese equities several years later before Japan’s economy crashed.

Jones told CNBC in March that he believed the stock market could be back higher by June if COVID-19 cases started to peak. He commented that at the time when he expected stocks to endure a choppy April, saying that these equities would eventually climb again.

His current announcement came when central banks, including the US Federal Reserve, begin working on significant monetary policy initiatives aimed to help businesses keep lights during the coronavirus crisis. The Fed already has created two emergency interest cuts, which lowered borrowing costs to near zero like they were during the 2008 financial crisis. But some investors are worried by the Fed’s move to print money and inject it into the US economy as this would zoom higher prices in the future.

Bitcoin price and the global financial crisis: Everybody’s looking at the wrong markets

While everyone obsesses over unemployment, inflation, bailouts, and stock markets, the biggest global financial risk comes from debt markets. Such opaque and complicated markets hold trillions of dollars worth of household, government, and corporate debt, including all the derivative financial products based on such debt. Since September last year, the US federal reserve has supported banks with overnight loans to cover a shortfall in cash. A collapse in the debt market is likely to ruin the global financial system.

Currently, people have so many problems in such markets, and it is difficult to figure out where to begin solving the problems. No amount of money printing could fix these problems. While the financial system of the world teeters on the edge of collapse and deflationary depression, the crypto sphere is hyping Bitcoin as a way to capitalize on inflation from all the money that governments are printing in response. Many people increasingly see Bitcoin as a safe haven in the financial crisis. People appear to flee the sinking fiat currency in favor of the digital currency with no central control.

Image via WSJ

Bloomberg Predicts Bitcoin Price to Surge Past $20,000 in 2020, Doubling Last Year’s High

Bloomberg predicted in its recent report that Bitcoin’s price in 2020 could reach double of last year’s high of $14,000.

It further suggested that adoption is the primary Bitcoin metric, and Bloomberg takes a positive outlook on this end.

Looking at the trend during the previous Bitcoin halving event in 2016, the cryptocurrency seems to be mirroring the same trend and returning to its previous peak.

Bitcoin’s price has seen a 60% decline in 2014, and at the end of 2016, Bitcoin matched the peak in 2013. If Bitcoin chooses to follow the same trend as 2016, with a 75% decline in 2018, Bitcoin is headed towards $20,000, according to Bloomberg.

According to the report, institutional investors such as Grayscale, also known as GBTC has been consuming around 25% of the new supply.

Progressing towards the digital equivalent of gold

The coronavirus pandemic has been pushing Bitcoin’s maturity, says the report. Based on volatility readings, Bitcoin is gaining the upper hand, against the stock market. Bitcoin’s 260-day volatility measure is the lowest ever compared to the stock gauge.

As Bitcoin’s volatility is at its lowest-ever against crude oil, this indicates that the cryptocurrency is joining the mainstream and progressing towards the digital equivalent of gold. The graph below shows Bitcoin’s volatility is around 2x the Nasdaq. When Bitcoin’s price and index first crossed paths in 2017, it was closer to 7x.

Source: Bloomberg

In Bloomberg’s Crypto Outlook April 2020 report, Bitcoin’s transformation into a safe haven asset like gold was said to have been accelerated by the coronavirus disruption. Taking into account that Bitcoin’s on-chain indicators are remaining price supportive, the report reveals that the coronavirus appears to be accelerating Bitcoin’s performance much more than the broad cryptocurrency market.

Futures driving Bitcoin’s future

Bitcoin futures trading on the CME has seen favorable trends and are supportive of the price, according to Bloomberg. Increasing futures open interest and the stead price premium will reduce volatility even further and will drive the Bitcoin price up.

As Bitcoin was given the golden ticket has Bitcoin futures were being traded on a US-regulated exchange, while the Securities and Exchange Commission (SEC) on the other hand was reluctant to approve Bitcoin exchange-traded futures (ETFs).

COVID-19 may give Libra life

COVID-19 has highlighted vulnerabilities in the fiat world, and markets have been built on outdated technology. As the Fed is considering a digital dollar, Facebook’s Libra gets a bit of the spotlight, as Wells Fargo, Truist and U.S. Bank are looking for new tech upgrades.

The Libra Association recently welcomed Singapore’s state investor, Temasek Holdings. Temasek as a portfolio value of 313 billion Singapore dollars (roughly $219 billion), making it one of the more prominent backers of Libra.

Bitcoin Price Will Hit $20,000 in 2020? Not Even Close Says Peter Schiff

Bitcoin has been having a good year and a very strong price showing since the Black Thursday stock market crash in March.

Since the COVID stock market crash on March 14, there has been a focus on the price of gold as the traditional store of value with the precious metal gaining over 15% since the dip. Bitcoin has gained more than 150% since March, after dipping below 4k recovering to its pre-crash levels faster than almost any other asset.

Bitcoin’s Safe Haven and $20, 000 Price

In their June report, Bloomberg predicted that Bitcoin’s price in 2020 could reach double of last year’s high of $14,000.

Despite these predictions and increased reporting of institutional adoption and even rumors that PayPal will begin offering Bitcoin sales to its 300 million users—investor Peter Schiff says an all-time high will be achieved by gold and he asserts Bitcoin won’t even come close to hitting a new high.

Peter Schiff Predicts Gold Not Bitcoin ATH

Over the past few months, Gold the price of gold has surged but it appears to be a combination of central-banks stocking up on the asset and investors reactions the money printing policies of the Federal Reserve and ECB to stimulate the economy.

One Twitter user directed his comments to gold-advocate Schiff, they said, “Since gold peaked over 8 years ago, its price today is back to that level, while the price of #Bitcoin has risen by over 150,000%. So which one of you has been wrong over the past 8 years? Bitcoin is in a bull market and headed much higher, yet you remain in denial.”

On June 28, Schiff replied, he tweeted, “I’m just talking about the last 2.5 years. I was wrong not to buy Bitcoin 8 years ago, but anyone still holding it was wrong not to sell it 2.5 years ago. #Gold will likely make a new all-time high in 2020. BTC won’t even come close.”

This time Schiff is not alone in his Gold price prediction. The CIO of Morgan Stanley Wealth Management, Lisa Shalett, also recently made the case that the US dollar may be reaching a peak and argued that gold should perform under such conditions. Shalet said: “The dollar may be near a peak,” she continued “If the dollar weakens, this may be a good time for certain investors to consider adding some gold to their portfolios.”

Bitcoin Poised for a Breakout, BTC Price Shows First Buy Signal Since COVID Crypto Market Crash

Bitcoin’s price has been trading around the $10,000 level for weeks, however, this could all change as Bloomberg said that technical indicators suggest Bitcoin (BTC) could be poised for a breakout.

According to the GTI Global Strength Indicator, Bitcoin showed its first buy signal since March, when the coronavirus led to the crypto market crash. The world’s largest cryptocurrency rallied 200 percent after the Bitcoin crash in March.

Bitcoin was trading in the past 24 hours, surging past the $11,000 resistance level, however, has retraced slightly at press time, trading at $10,897. Steve Ehrlich, CEO and co-founder of Voyager Digital said:

“Bitcoin is extremely resilient and as it gains more and more adoption, in conjunction with better regulations suited to support Bitcoin, it continues to demonstrate its position as a reliable store of value.”

Although Bitcoin’s price has been swinging around $10,000 to $12,000 in the past few months, BTC’s price has been up about 100 percent since mid-March. Due to the widespread risk-on sentiment, Bitcoin and altcoins have been seeing gains in conjunction with US equities.

Recently, large institutions have been eyeing the cryptocurrency, with Fidelity launching its institutional Bitcoin fund in late August. Billion-dollar intelligence firm, MicroStrategy has also purchased two large sums of Bitcoin, first in August, and the second time recently in the past few days. MicroStrategy CEO Michael J. Saylor also named Bitcoin as “digital gold,” in a press release explaining why the company chose Bitcoin as the firm’s primary reserve asset.

MicroStrategy’s move to hedge its cash reserves using Bitcoin has stirred a complimentary move among Wall Street investors including billionaire Paul Tudor Jones. The foremost investor believes that the continuous printing of more money to cushion the coronavirus effects will spike inflation, making fiat currencies unattractive in comparison with digital assets like Bitcoin. Nigel Green, chief executive and founder of deVere group commented:

“Bitcoin’s key characteristics, such as its fixed supply and how transactions are immutable, distributed, non-sovereign and decentralized are highly attractive for investors in an uncertain but increasingly digitalized, tech-driven world. It has already earned it the label ‘digital gold’ and I believe its status in this regard will grow exponentially over the next year or two.”

Cryptocurrency Market Outperforms Gold in 2020, Mostly Due to DeFi Hype

The decentralized finance (DeFi) industry has been propelled digital currencies to be this year’s best-performing asset so far. According to the Bloomberg Galaxy Crypto Index, digital currencies have been performing up by 66 percent in 2020, exceeding that of gold’s performance by 20 percent.

Cryptocurrencies have also beat global stocks, bonds, and commodities this year, due to the surge in Ethereum, which accounts for more than one-third of the cryptocurrency’s run this year.

Mike McGlone, explained that Ethereum’s climb has been powered by the increased adoption of decentralized finance, which “appears to be maintaining its platform leadership status” in the sector.

The decentralized finance sector has been gaining momentum, as the new phenomenon of “yield farming” has taken over the cryptocurrency sector. Yield farming allows traders to lend or borrow cryptocurrency, to receive different types of digital tokens. In order for users to provide liquidity, users must put tokens into the project, which are then locked up in DeFi, reducing the supply of cryptocurrencies. The DeFi industry currently has over $9 billion in cryptocurrencies locked, according to DeFi Pulse.

Only investors with a large amount of capital would be able to generate high rates of return via yield farming, which also questions how decentralized DeFi actually is. Although the DeFi sector has been surging with popularity, recently, most DeFi tokens plummeting, mostly due to selling pressure.

Most investors have chosen the easy way out to profit from the DeFi industry, as seen with the cracks with the SushiSwap project. Time will tell if DeFi is a bubble and whether the industry would be sustainable in the long run.

Bitcoin is “refuge” like gold

According to Marc Fleury, CEO of crypto asset management firm Two Prime, the cryptocurrency market has been performing well despite the COVID-19 pandemic because Bitcoin has become a “refuge,” like gold. Bitcoin is a hedge against risks, Fleury added:

“A purely ethereal instrument performs well when the real economy is on pause.”

Bloomberg also previously highlighted the correlation between Bitcoin and gold, saying that the two assets are now more correlated than ever since 2010. Investors have recently fled to safe haven assets during the economic turmoil, including the injection of fiat currencies in the market, due to the recent economic stimulus.

The coronavirus pandemic has been pushing Bitcoin’s maturity, according to one of Bloomberg’s reports. Based on volatility readings, Bitcoin is gaining the upper hand, against the stock market. The COVID-19 crisis has been a catalyst for Bitcoin’s transformation into a safe haven asset like gold, and should continue if the stock market remains weak.

Bitcoin Price to Reach $100,000 in 2025 as BTC is Increasingly Becoming Digital Gold, says Bloomberg

Bitcoin could take five or more years to reach the price of $100,000, according to Bloomberg’s demand indicators. Bitcoin (BTC) has had a history of adding zeros to its price when Bitcoin first traded at $1,000, it took 4 years to add another zero, to reach $10,000.

Bloomberg suggests that for Bitcoin to add another zero, reaching $100,000, it would come around 2025, considering natural maturation. Bloomberg’s latest crypto report read:

“About four years after initially reaching $1,000, it added a zero. Considering normal maturation, about double the time frame from $1,000 to $10,000 would come in around 2025, for Bitcoin to potentially add another zero.”

Bloomberg’s chart also indicates that the 260-day annual measure of volatility is heading downward, with most demand and adoption measures pointing to the fact that Bitcoin will stay on a bullish path. Bloomberg’s demand indicators suggest that Bitcoin’s price is on track toward the $14,000 Bitcoin resistance.

With Bitcoin’s unique finite supply, Bitcoin’s supply cannot be influenced by price. Therefore, the adoption of the world’s largest cryptocurrency is a primary valuation metric for Bitcoin. Bitcoin’s supply is also declining on an annual percentage basis, which could also increase its price and demand.

MicroStrategy invested an additional $174 million in Bitcoin in September, totaling 38,250 Bitcoins at an aggregate purchase price of $425 million. Bloomberg added that Bitcoin’s market is too small for many large institutions, at $200 billion, including for central banks. If the market capitalization of Bitcoin increases, BTC would increasingly be more like a digital version of gold.

Bloomberg stressed again that Bitcoin has increasingly become more like gold, as Bitcoin-to-gold correlation has reached a new high since 2010.

Central bank digital currencies are a matter of time

As the demand for Bitcoin is set to increase, like a digital version of gold, Tether may surpass Ethereum in terms of market capitalization. As the adoption of stablecoins is increasing, central bank digital currencies (CBDCs) “are a matter of time,” according to Bloomberg. The report added:

“It should take something significant to stall the increasing adoption of Tether, the top stable coin, which is on pace to match the capitalization of Ethereum in a bit less than a year, based on the regression trend since the start of 2019.”

Tether represents a stable form of payment, unlike other cryptocurrencies. The report explained, “The still deflating broad crypto-asset bubble from 2017 is migrating assets toward Tether.”

Bitcoin to See a Parabolic 2021 as Analyst Hints at Historical Trend that Could Take BTC to a New All-Time High

Bitcoin’s price has rallied above $14,000, due to the uncertainty of the outcome of the US presidential elections. The Bitcoin price rallied over 5 percent, reaching highs of $14,453 its highest level since January 2018. BTC is now trading a bit lower, at $14,482 at press time.

The $14,000 level has been a crucial level for investors, as Bitcoin bulls see it as a flip from a resistance level to a support level. $14K also marks the level of where the December 2017 candle closed, and where 2019’s Bitcoin boom topped. For Bitcoin to continue on with its bullish momentum, investors have warned that the cryptocurrency will need to trade above $14,000 for a sustained period of time.

Bitcoin to go parabolic in 2021 following previous trends

Bloomberg said that Bitcoin could take five or more years to reach the price of $100,000, according to the firm’s demand indicators. With BTC’s finite supply, the cryptocurrency’s supply cannot be influenced by its price, making adoption a primary valuation metric for the crypto.

Bloomberg’s senior commodity strategist Mike McGlone commented that Bitcoin may become parabolic in 2021, following the same pattern in its history in 2013 and 2017. McGlone explained:

“Bitcoin may undergo a parabolic 2021, as it did in 2013 and 2017, if previous patterns play out again. New highs are a next potential iteration and may be only a matter of time unless something we don’t foresee trips up the trend of greater adoption and demand vs. limited supply.”

Indicator hints at Bitcoin to reach a new all-time high

While Bitcoin’s price has been surging, the BTC balance on exchanges has drastically decreased. Cryptocurrency analyst Carl Martin highlighted that the last time the same trend was witnessed was when Bitcoin reached an all-time high:

“The #Bitcoin Balance on Exchanges is dramatically decreasing right now while the #BTC price is going up. The last time we did this, we were very close to breaking the all-time high! I can smell it already.”

Bitcoin to benefit from the election uncertainty

While the US election polls are closing, and results are expected soon, Bitcoin rose above $14,000 for the third time in 33 months. BTC’s recent rise above $14K also marks the second time the Bitcoin price exceeded this level in four days.

As investors remain on edge with the uncertainty of the elections, cryptocurrencies could only benefit. David Tawil, the president of ProChain Capital commented:

“The longer that we don’t have a president technically and the longer that we don’t have agreement among the population is positive for crypto. If the courts are forced to get involved, volatility (and ear) will reign for a while. Add all this to the fact that crypto has been performing incredibly well this year — better than gold and stocks — crypto is going to gain and gain a lot of believers.”

Bitcoin has performed better than gold and stocks this year

Bitcoin has seen a massive rally after PayPal’s announcement last month to allow customers to buy and sell cryptocurrencies. Bitcoin saw a surge to over $13,000 shortly, after multiple institutions have made the decision to invest in the cryptocurrency. Bitcoin also recently reached its second-highest ever monthly close for October, rising above $14,000. Edward Moya, a senior market analyst at Oanda Corp. said:

“Bitcoin has made tremendous progress in the last few months in creating institutional interest, and we’re starting to see increased use of cryptocurrencies. This is part of the whole longer-term goal of mainstream acceptance.”

Although the institutional adoption of Bitcoin has been on the rise, wall-street veteran Raoul Pal believes that even MicroStrategy’s bet on Bitcoin may have not convinced other traditional institutions. Pal emphasized that MicroStrategy’s CEO, Michael J. Saylor has not been “speaking the right language” for crypto adoption.

Bitcoin Price on Pace to Reach $20,000, Bloomberg Senior Strategist

The Senior Commodity Strategist for Bloomberg Intelligence, Mike McGlone says Bitcoin (BTC) may well be on pace to reach US$20,000 by 2021.

The Bloomberg strategist also forecasted gold’s price to hit $2,000 and believes the fundamental and technical factors are there to back his BTC price forecast of $20,000.

McGlone gave this Bitcoin and gold price forecast via a tweet, according to him:

“Pendulum Swings Favorably Toward $2,000 Gold, $20,000 Bitcoin. Annual average prices are on pace to reach $2,000 an ounce for gold and $20,000 for Bitcoin in 2021. Refreshed bull markets in the quasi-currencies, with improving fundamental and technical underpinnings…”

The bullish price forecast from McGlone is in line with other analysts’ recent projection of an uptrend in Bitcoin’s price. Bitcoin has seen impressive gains in November with the premiere digital currency surging to a yearly high of $15,960 as reported by Blockchain.news. Some of the gains Bitcoin has seen were however lost following the emergence of Joe Biden as the president-elect of the United States of America. This did not stop McGlone’s future forecast for the BTC price to hit $20,000 by 2021.

BTC Is Seeing Institutional Activity To Drive the Growth

Bitcoin has seen increased institutional adoptions with PayPal amongst the most recent to show goodwill to the coin by enabling Bitcoin and crypto payment services. The move by PayPal will open its millions of users to Bitcoin and other supported coins and this has the potential to increase the overall adoption of Bitcoin.

Other publicly traded Wall Street firms including MicroStrategy and Square have also stocked up on the coin and Coinbase noted a significant uptick in Institutional adoption of Bitcoin and crypto in the first half of 2020.

With Bitcoin gaining grounds as a viable hedge against inflation, Bitcoin’s value is projected to surge five-folds by 2023 as institutional investors continue to swap gold for Bitcoin.

Bloomberg’s Senior Strategist says Bitcoin Could Consolidate Like Gold Before Rallying Higher

Bitcoin’s price has rallied to new highs recently, and the BTC price is currently sustaining its trading above the $18,000 level. Alternative asset gold surged to a new all-time high this year, surpassing $2,000 per ounce. Bloomberg has long referred to Bitcoin as “digital gold,” while citing that Bitcoin has safe haven asset properties.

As previously reported by Blockchain.News, Bloomberg said that Bitcoin could take five or more years to reach the price of $100,000. The firm explained that the world’s largest cryptocurrency has had a history of adding zeros to its price, according to Bloomberg’s demand indicators.

For Bitcoin to reach $100,000 around the year 2025, Bitcoin’s adoption would need to increase, as its supply cannot be influenced by price; therefore, the adoption of the cryptocurrency is the primary valuation metric for the digital asset.

According to Bloomberg’s theory, investor interest, especially institutional would have a great impact on the Bitcoin price. This was witnessed earlier this year, when Bitcoin began its bull run after PayPal’s announcement of accepting cryptocurrencies including Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.

Mike McGlone, a senior strategist at Bloomberg said that Bitcoin’s price could potentially soon add another zero to the back of its number, providing a projection of over $170,000 per BTC. McGlone referenced Bitcoin’s price at $7,000 at the end of 2019, and Bitcoin has since added a 1 to the number, taking it to over $17,000.

McGlone said that $20,000 could be Bitcoin’s resistance, and the BTC price could do what gold did—it got to $2,000 and consolidated the bull market since. McGlone reiterated that Bitcoin is becoming a digital version of gold, and added that Bitcoin’s volatility has decreased. He explained:

“One key point that’s happening this year is Bitcoin volatility has been declining; in fact, it;s the lowest ever vs. gold. Every other risk asset on the planet, volatility has been increasing, Bitcoin has been declining.”

As many investors have been wary about investing in Bitcoin and other cryptocurrencies due to its volatile nature, McGlone’s observation would render these past concerns inaccurate due to Bitcoin’s price movements as of late.

With institutional investors including MicroStrategy, Square, and Grayscale hodling more Bitcoin, the BTC supply is only going to decrease in circulation. As more institutional investors hop on the Bitcoin bandwagon, Bitcoin’s price would only steadily increase, as explained by Bloomberg’s demand indicators. Adoption is a key metric to watch out for as part of determining Bitcoin’s future price movements.