The price of Bitcoin could reach as high as US$400,000 this year based on its previous bull runs, according to new data from crypto analysts at Bloomberg.
In the April edition of its Crypto Outlook 2021, the analysts said the original digital currency was “on similar ground” as its 2013 gains, which saw its value multiply by 55 times, and in 2017 where it swelled 17 times in value.
“To reach price extremes akin to those years in 2021, the crypto would approach $400,000, based on the regression since the 2011 high”, the report said.
Meanwhile, Bloomberg highlighted that global indicators showed a “shifting global tide” in favour of Bitcoin over gold as a reserve asset, while the decision of major firms such as Tesla Inc (NASDAQ:TSLA) to invest in the crypto could also boost its value and reputation as a “potential global digital store-of-value”.
The report also noted a “rising tide” of investment into crypto assets by both institutions and individuals, with assets in publicly traded crypto funds having surged to almost US$60bn as of March 25 from less than US$10bn in October last year.
“Even with speculative excess in the broader crypto market, we believe Bitcoin is less prone to a sustained trip up. The imminent launch of Bitcoin-oriented US exchange-traded funds is another bullish underpinning”, the report said.
But could it all be a Chinese trap?
While Bloomberg’s analysts are uber-bullish on Bitcoin, investors elsewhere in the sector are less positive about the sector, with some even warning the cryptocurrency could be a financial weapon being wielded by the Chinese government.
On Wednesday, billionaire investor Peter Thiel, co-founder of PayPal Holdings Inc (NASDAQ:PYPL) and Palantir Technologies Inc (NYSE:PLTR), said that Bitcoin could be a “Chinese financial weapon” that could pose a threat to the US dollar’s status as the global reserve currency.
Thiel’s comments at the Richard Nixon foundation follow similar comments by Canadian businessman Kevin O’Leary, who said last month that the potential exposure to China through Bitcoin may cause issues with those considering investing in the cryptocurrency.
Chinese Bitcoin miners account for around 80% of the entire world’s cryptocurrency trade, leaving the sector acutely exposed to any governance changes inside the authoritarian state.
Bitcoin was trading 0.03% higher at US$56,757 in lunchtime trading on Thursday.