Market Watch – CNY Edition

14 February 2021

  • BTC bulls eye $50,000+ as data show Bitcoin liquidity supply
  • Speculation from crypto analysts and industry experts suggests that Bitcoin’s long term value could reach over $100,000 to as much as one million dollars per BTC in the future.
  • Morgan Stanley to consider Bitcoin for $150 billion investment wing
  • Ethereum significantly outperformed bitcoin for January (+77%) on anticipation of an upcoming listing on the US Chicago futures market and DeFi growth
  • Polkadot has been one of the best performing crypto assets of late and recently moved into the top-5 crypto assets in total market value at ~$20b at present
  • PayPal announced that it plans to extend itscrypto services to residents of the United Kingdom.

Bitcoin and Ethereum make new all-time highs while traditional markets wobble

In January crypto continued its strong Q4 2020 momentum with bitcoin setting a new all-time high at just under $49404 on Valentine’s Day, a whisker away from $50K! Ethereum (ETH) had an even more impressive run in 2021 to today at +146%. Both are up around 1,000% over the last two years with Ethereum now outperforming Bitcoin over that time period.

Over the last week a torrent of enthusiasm has broken down the floodgates keeping Bitcoin out of ‘the system’ in the West. Tesla,  Mastercard and Visa are all welcoming Bitcoin and cryptocurrencies (though central banks still insist it’s not cool), as well as leading mainstream culture magazines, making it clear that we’ve started that stage of the current bull run- where everyone wants to join the party.

Institutional investors rapidly gobbling up Bitcoin, and at the time of writing, nearly 3% of BTC in circulation are locked up in long-term holdings by these investors.

Data shows that 24 entities have amassed more than 460,500 BTC, which is equivalent to $22 billion at Bitcoin’s current price. The current list of holders includes MtGox, which has close to 141,690 BTC ($6.6 billion). Next is Block.one with an estimated 140,000 BTC $6.5 billion). MicroStrategy also has about 71,000 BTC ( $3.3 billion) and this week Tesla bought 38,500 BTC (about $1.8 billion).

Analysts now expect that holding Bitcoin in treasury will soon become a corporate standard as there are multiple technical reasons for viewing Bitcoin as an inflation hedge.

Considering that over 60% of the Bitcoin supply hasn’t moved in more than a year, a $300 billion inflow is nearly unimaginable for an asset with a $355 billion free float. 

Moreover, newly minted BTC by miners adds up to 341,640 annually, a mere $16.3 billion. Therefore it is safe to conclude that the steady allocation of BTC to corporate treasuries could more than double the current price of Bitcoin.

Traditional markets

Global stocks began the week with gains amid signs that reflation trade has further to run  as the pace of coronavirus outbreaks began to slow. WTI crude breached $60 dollars a barrel as an arctic freeze gripped parts of the U.S.

South Korean and Japanese shares led Asia higher, with the Nikkei 225 hitting 30,000 for the first time since 1990. Data showed Japan’s economy grew by double-digits last quarter, beating expectations. S&P 500 and European futures pointed to gains. U.S. markets are shut for Presidents’ Day, while exchanges in China, Hong Kong and Taiwan are also closed on Monday. The dollar retreated.

Australian bonds slumped after U.S. yields jumped Friday. Treasury futures dipped in Asia trading. The pound jumped to the highest since April 2018. 

Investors are banking on U.S. government spending and the coronavirus vaccine rollout to boost the economic recovery, though new variants are threatening to temper the outlook.

Countries easing restrictions include Malaysia, which will allow national football and hockey leagues to start training. Hong Kong will permit restaurant dining and relax other social-distancing rules after the lunar new year holidays. New U.S. cases declined to the lowest week-to-week average since late October.

SPECIAL EDITORIAL

Bitcoin is a decentralized financial technology that could 

replace fiat currencies, price predictions from experts reach as much as $1M.

Experts Share Their Thoughts on Bitcoin Future

Max Keiser, Financial Analyst and Host of The Keiser Report

Robert Kiyosaki, Entrepreneur, Investors, and Best-Selling Author

Keiser is one of Bitcoin’s most outspoken bull, calling for $100,000 since the asset was trading at just $1. His new $100,000 target though is for the end of 2020, meanwhile, $400,000 is a long-term goal due to the coronavirus and a comparison to gold

Kiyosaki, New York Times bestselling author of “Rich Dad, Poor Dad” has been recommending his followers to buy Bitcoin and. He projects gold to reach $3,000 an ounce, and Bitcoin to reach $75,000 within the next three years.

Adam Back, Bitcoin Developer and CEO at Blockstream

“BTC might not require additional institutional adoption to reach $300,000 because the current economics and state of society is causing more individuals to think about hedging and retaining value when there’s a lot of money printing in the world,” Back told Bloomberg.

Plan B’s Stock-to-Flow Model Based on Scarcity

The popular Stock-to-Flow model created by Bitcoin expert Plan B which uses the asset’s digital scarcity to estimate price valuations in the future. The model shows Bitcoin reaching as high as $288,000 in the next cycle peak, which should take place over the next couple of years.

Technical Analysis and Forecast on BTC

Crypto analysts often perform technical analysis to predict price movements over time. Here are some of the best technical analysis from the industry’s best analysts in order to further help understand how high Bitcoin can go.

2021 – The cryptocurrency is breaking out into a new bull run and has gone parabolic. Prices could reach $100,000 to $325,000 this year.

2022 – 2023  Following a similar trajectory as the last cycle, Bitcoin would top out around $325,000 then could drop to where the asset is consolidating at currently around $35,000.

2024 -2025  And just like a new bull market started and the bubble pattern began again right after each hard-coded halving, another one is due towards the end of 2024 and into 2025, giving Bitcoin a unique four-year market cycle.

The below prediction chart outlines some of the minimum and maximum BTC price forecasts offered by technical analysts and industry experts in an easy to digest format.

YearHighLow
2021$325,000$17,000
2022$275,000$42,000
2023$145,000$63,000
2024-2025+$1,000,000$275,000

Philip Tam

Co-founder

Sources/Reference

coindesk, CoinMarketCap, Coincodex, Cointelegraph, PRIME XBT

Bloomberg

Author: Cryptosx

Cryptosx is a licensed and regulated digital asset exchange that supports different classes of digital and crypto assets including BTC, ETH, USDT, LTC, XRP and BCH.

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