A new Bloomberg report speculates that Bitcoin and the crypto market are preparing for a new monumental bull run similar to the explosive period of 2017.
This is the view of Bloomberg intelligence, a team of 250 analysts who, with more than 300 companies collaborating to provide financial market data, aim to provide analysis for professional investors and develop targeted investment strategies.
Bitcoin Maturation Leap, this is the title of the recently released report that deals with Bitcoin and the public blockchain market.
The document mentions that Bitcoin was born during the financial crisis of 2008.
Its paradigmatic characteristics could be successful thanks to the alternative it proposes compared to a system that today is once again in big trouble.
Investors such as Anthony Pompliano, Michael Novogratz or Tim Draper have recently been sharing their predictions, though their bullish stance on this market has been known for years. This time, however, it is an institution to focus its eyes on Bitcoin.
The Bloomberg intelligence report on Bitcoin
Bloomberg’s report states that in 2020 Bitcoin fell by less than a quarter compared to the S&P 500 (the top 500 listed companies), despite being almost 5 times more volatile and therefore riskier. In addition, the report suggests that the impact of the pandemic on the economy is preparing the ground for a positive performance of this market.
The parallelism with gold is of great interest to investors at a time when distrust of the monetary system is growing.
As can be seen from the chart below, the report wants to illustrate an interesting correlation that in the last 52 weeks has seen Bitcoin and gold moving side by side with similar movements, which are strongly separated from those of the stock market.
The introduction of bitcoin futures has been important to tame the bullish market that resulted in a sharp crash in 2018. According to Bloomberg, the increase in instruments like this will positively push the narrative of bitcoin as digital gold.
In addition, the report goes on to suggest that the volatility of bitcoin will decrease with adoption.
The lowest volatility of all time experienced at the end of 2015 was later interpreted as the main indicator to suggest the beginning of the bullish phase culminating in the legendary 2017 rally.
Bitcoin could approach, as it did at the time, an inflection point in volatility which could result in similar outcomes.
Bloomberg’s report points out that bitcoin is currently undervalued in terms of prices when compared to on-chain indicators.
Finally, Bloomberg’s article points out that central banks could enter this market with their instruments.
It is hypothesized that they would compete directly with private companies like Facebook in the development of digital currencies capable of exploiting the technological innovations that have emerged thanks to the blockchain market.
Although these instruments are extremely different in their principles and technological architecture, they will be perceived as part of the same market during the period that will lead us to a new steep rise in prices.