- Experts say Bitcoin would inch away to gold’s market capitalization
- They do not discount Bitcoin’s remarkable 2020 despite the cryptocurrency being down $12,000 from the previous all-time high
- Bitcoin is considered a strong hedge against inflation
Despite Bitcoin briefly receding to around $29,000, the overall long-term outlook is still bullish for the dominant cryptocurrency, with analysts expecting it to eventually go above $50,000.
Vijay Ayyar, head of Asia Pacific with crypto exchange Luno in Singapore, told Bloomberg Tuesday that Bitcoin will be “slowly inching away at gold’s market capitalization” over the next several years. As long as it does that, the benchmark cryptocurrency would find its way above $50,000, Ayyar suggested.
Bitcoin briefly slipped below $30,000 Wednesday, almost touching $29,251 on Coinbase. It started the day at $30,366, which is already $12,000 below the previous all-time high price of $42,000. While Bitcoin is still up 80% in the last three months, it’s now 21% down versus the previous 30 days.
Still, analysts do not discount that Bitcoin did have a remarkable 2020. After dropping to $3,800 in March 2020, it culminated with the historic breach of the 2017 peak at $20,000, considered the psychological resistance. Skeptics were proven wrong when, after breaching $20,000, it did not retrace and continued its rally this month.
Amid the backdrop of the pandemic and political and economic uncertainty, Bitcoin has proven to be a hedge against inflation, brought about by constant money printing and quantitative easing.
“Increasingly the new to market money that we are seeing is buying Bitcoin as a hedge to inflation and as digital gold,” Matt Long, head of distribution and prime brokerage at digital-asset platform OSL in Hong Kong, told Bloomberg.
Even corporations like MicroStrategy had put Bitcoin in its reserves. Institutions like MassMutual and Guggenheim have begun putting Bitcoin in their portfolios. PayPal has allowed its U.S customers to purchase cryptocurrency on its platform.
Still, while the long-term outlook is bullish, in the short-term, a number of bearish predictions have been forecasted. Scott Minerd, CIO of Guggenheim Investments who previously said his firm values Bitcoin at $400,000, recently said he expects the cryptocurrency to go back to $20,000 soon. His advice is for investors to take caution and make some profits off the market.
Wall Street investment giant BlackRock has said its funds may start investing in bitcoin in what could become a boost for the use of cryptocurrencies