Many analysts asserted that 2020 would be a strong year for the Bitcoin market long before the current global economic crisis began. Most notably, the flagship cryptocurrency was expected to jump after May’s block reward halving. New data now suggest that these predictions are still on-track.
Data And Public Sentiment Point To Major Bitcoin Gains
Analyst PlanB continues to stand by the assertion that Bitcoin’s stock-to-flow ratio points to extremely high gains after the halving. This metric is determined by comparing present inventory to production and is a common tool used to gauge the value of hard commodities such as precious metals.
PlanB has just tweeted:
So #btc has been oscillating around S2F value of $7000 for 2.5 years now. Just like before 2016 halving ($300) and before 2012 halving ($6). Excited to see if we are going to add another zero after the halving in May
pic.twitter.com/2pkCgOSAEN
— PlanB (@100trillionUSD) April 4, 2020
Thus, although a prediction of USD $70k may seem outlandish, it would be perfectly in-line with previous gains for the flagship cryptocurrency. Also, there is no doubt that the capital exists to drive Bitcoin this high, as well as the public interest.
In fact, government responses to the impending recession may make Bitcoin and other cryptocurrencies even more attractive. A just-published article on HackerNoon asserts that the banks and legacy financial companies are all but certain to receive massive bailouts, just as they did in 2008. However, unlike twelve years ago, the infuriated public has the opportunity to put their assets into crypto, which will boost prices.
Author Mark Helfman writes:
Don’t underestimate the potential for this financial crisis to spur people into buying crypto and building businesses around crypto-based products, services, and processes. People might get so angry that they look for an “out” that doesn’t involve the banks, governments, and corporations.
It is worth noting that Bitcoin was born out of frustration with central banks, and the U.S. government’s willingness to prop up incompetent and corrupt financial institutions. It is safe to assume that a repeat of this cronyism would only drive more investors into the crypto space.
Real-World Adoption Will Push Exponential Growth
Market activity notwithstanding, the development and adoption of Bitcoin and other cryptocurrencies are rapidly taking place. Of particular note is the institutional embrace of blockchain technology by a wide range of industrial sectors. Also, whereas fiat remains strong for purchases, the world is increasingly turning to crypto for remissions and financial transfers.
It is these real-world use cases that will play a key role in driving up Bitcoin’s value. In other words, the central bank-issued fiat must now compete with a new asset class that offers many clear advantages. When placed in this context, predictions of much higher Bitcoin prices are very realistic.
Do you think Bitcoin price will surpass it’s all-time high this year? Let us know your thoughts in the comments below.
Images via Shutterstock, Twitter: @100trillionUSD