Rick JamesParticipantNovember 17, 2020 at 7:21 amPost count: 4
That’s a target issued by Thomas Fitzpatrick – a Managing Director at banking giant Citibank.
Fitzpatrick is also the global head of the award-winning CitiFXTechnicals product within the G10 FX business. In a report addressed to Citi’s (NYSE: C) institutional clients, he dubbed bitcoin as the new gold. He also went on to assign a ‘hold-your-breath’ price target of $318,000 for the cryptocurrency by the end of 2021. (CryptoPotato)
Here are the key points of his study.
– His assessment is based on an analysis of several historical price cycles.
– The current economic uncertainties heighten the bullish case for bitcoin, because “the huge fiscal deterioration of today has a cost in the future, either directly or indirectly.”
– Structural advantages of bitcoin –
– Limited supply
– A digital form
– Opaque ownership
– Easy movement across borders
– Looming central-bank digital currencies (CBDCs) would only be more FIAT, albeit in a digital form. They also make “capital confiscation easier (example: negative interest rates).”
– Therefore, bitcoin is more favorable compared to CBDCs.
– Bitcoin is in a bull market that commenced in December 2018.
– Historically, each bullish cycle has been longer than the previous one, even though painful and bearish corrections interspersed the bullish moves.
– On a time basis, the cycle could stretch up to the end of 2021.
– Bitcoin’s price could move as high as $ 318,000 by that time.
Bitcoin the new gold
The macroeconomic factors (such as the massive global deluge of helicopter money by way of the stimulus) that improve the prospects for bitcoin similarly impact gold.
However, the yellow metal suffers from some serious limitations.
“Gold has restrictions such as storage, non-portable, and could possibly be even called ‘yesterday’s news’ in terms of a financial hedge,” says Fitzpatrick. “Bitcoin is the new gold.”
However, he does warn that bitcoin’s ascent will be marked by gutwrenching market declines (“unthinkable rallies followed by painful corrections”) and that the cryptocurrency could suffer increasing regulatory glare.
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