Report 'Does Bloomberg Have Just Joined the BTC Movement?' by rate3 at 15 Jun 2020

Does Bloomberg Have Just Joined the BTC Movement? Source

Among waves after waves of an economic, political and regulatory negativity coming on us from all sides it’s highly tempting to inject into our system some doze of hopium. Such as, for example, June 2020 Edition of Bloomberg Crypto Outlook.

It stipulates “Bitcoin will approach the record high of about $20,000 this year” and provides some arguments to support this conjecture. I will give to you both my brief recollection of its and then direct citations of BTC apology.

So, basically, Bloomberg’s analysts forecast BTC rising to all-time-highs this year because of the following 10 reasons:

1) its constrained supply;

2) favorable technical indicators (including forming support around $8,000);

3) BTC is following 2016 price pattern;

4) BTC is already better than oil and NASDAQ in terms of volatility;

5) there’s an existing premium on futures;

6) highest level of active addresses;

7) increased marketcup of stablecoins;

8) shift away from paper money (coronavirus);

9) Grayscale’s increasing buys of new BTC;

10) FED support for digital dollar.

Extract: “The same forces buoying gold support Bitcoin, yet the supply of the crypto is more constrained. … This year is about increasingly favorable technical and fundamental underpinnings for Bitcoin … Bitcoin is mirroring the 2016 return to its previous peak.”

Extract: “The lowest-ever Bitcoin volatility vs. crude oil indicates the crypto joining the mainstream and progressing toward the digital

equivalent of gold … The coronavirus is accelerating Bitcoin’s maturity

vs. the stock market and crude oil … Bitcoin Volatility Is Lowest Ever vs. Nasdaq Bitcoin Gaining Upper Hand vs. Nasdaq”

Extract: “A stabilizing premium in the Bitcoin futures price is supporting the market and indicates more institutional buy-and-hold interest. … The highest level of active addresses in about two years favors a higher Bitcoin price … Bitcoin adjusted transactions and the hash rate indicate a firming foundation around $8,000 “

Extract: “The rapidly increasing market capitalization of stable coins [At over $10 billion in May, vs. about $4 billion a year ago according to Grayscale] indicates currencies are going digital and supports the Bitcoin price. Covid-19 is hastening the shift away from paper money … The advancing dollar will fuel demand for the Tether stable coin, in our view.”.

Extract: “Grayscale Trust increasing AUM (which) has consumed about 25% of new Bitcoin-mined coins. … Covid-19 may highlight vulnerabilities in cash-based transactions and markets built on outdated technology, driving the Fed to reconsider issuing a digital currency, giving Facebook’s Libra new life”

Authors also point out that market conditions are ‘less favorable for the broader crypto market’, with reference to ‘Bloomberg Galaxy Cypto Index’ (BGCI), which shows one-year performance of minus 23% (as opposed to Bitcoin gaining +11% during the same time period).

At the same time, if we have a closer look at the BGCI composition (Bitcoin (30%), EOS (~5%), Ethereum (~25%), Ethereum Classic (~1%), XRP (30%), Bitcoin Cash (~4%), Litecoin (~4%), and Zcash (~1%)) we see that overrepresented XRP is what drives this index down mostly.

However, we should not be smitten by this report just because Bloomberg’s name is unprinted on it and it looks like he has just joined the ranks of crypto-enthusiasts. Main stream analysts had been proven wrong so many times in the past that them expressing positiveness about BTC might even been seen as a bearish indicator.

Link: https://data.bloomberglp.com/professional/sites/10/Bloomberg-Indices-Outlook_Cryptos_June-2020.pdf