The last Bloomberg report argues that Bitcoin is readying for a big bull run similar to 2017’s crypto rally. This comes as Bitcoin is maturing as an asset, and the crash of traditional financial markets opens doors for mass adoption.
Bitcoin appears to be in a consolidating bull market and is poised to cement its status as digital gold, according to a new report from Bloomberg.
The analysis, from Bloomberg Intelligence veteran Mike McGlone, calls BTC a “resting bull” that will benefit from unprecedented levels of quantitative easing from central banks. With the bullish name “Bitcoin Maturation Leap”, the report also highlights the fact that BTC is up about 40% in the last 12 months, compared to a 15% drop in the S&P 500.
McGlone expects Bitcoin to outperform Ethereum, XRP, BCH and the altcoin market at large due in part to the coronavirus, stating that Covid-19 distinguishes Bitcoin from the other cryptos.
“The macroeconomic effects of the coronavirus accelerate Bitcoin’s process of gaining value relative to other cryptos. Most of the speculative spurt in the Bloomberg Galaxy Crypto Index (BGCI) to start 2020 has dissipated, and on a one-year basis, Bitcoin is up almost 40% to April 2 vs. about a 13% decline in the BGCI…
This year will confirm Bitcoin’s transition from a risk-on speculative asset to the crypto market’s version of gold, in our view.”
According to the report, Bitcoin futures helped tame the cryptocurrency’s notorious volatility and is a sign that BTC is maturing from a purely speculative investment to a digital alternative to gold.
Bloomberg also expects private digital asset projects like Facebook’s Libra to continue to struggle to attain approval from regulators. McGlone says bank regulators are far too skeptical on the reliability of assets created outside of the commercial banking system.
Additionally, the report suggests Bitcoin is inching closer to become “digital gold”, i.e. immune to negative market shock. For example, the following Bloomberg chart demonstrates that Bitcoin is reaching its closest 52-week correlation to gold since 2010.
Furthermore, the report goes on to suggest that Bitcoin volatility will continue to decrease. Although this is in line with the notion of Bitcoin truly becoming “digital gold”, it is nonetheless notable.
During the last few years, bitcoin has proven to be a good investment, but is it enough for it to replace fiat? It is hard to say but the interest of a giant like Bloomberg is optimistic about it. For now, BTC is doing very well compared to the stock market, attracting more and more investors and enthusiasts to the ecosystem… And that is another sign of maturity.