Bloomberg expects Bitcoin price to land on $400,000 in this halving cycle

In the latest edition of its monthly “Crypto Outlook,” Bloomberg, senior strategist Mike McGlone reports on the bullish narrative around bitcoin that has been going around for months now. and the burgeoning industry surrounding it. Coming from such a reputable firm, it was well received by all those having a warm heart for cryptocurrency, considering it to be another “sign” that the bull-run is all but over.

Possibly the most noteworthy highlight of the report was on Bitcoin’s price expectation. Bloomberg notes that the cryptocurrency is on a similar part as the 2013 and 2017 mining subsidy halving bull cycles, which points to a price of $400,000 for the asset in the current cycle that set in after last year’s halving:

“The technical outlook for Bitcoin in 2021 remains strongly upward, if past patterns repeat. Common companions for strong annual rallies in the first-born crypto — low volatility and halvings — are aligned favorably. Our graphic depicts Bitcoin on similar ground as the roughly 55x gain in 2013 and 15x in 2017. To reach price extremes akin to those years in 2021, the crypto would approach $400,000, based on the regression since the 2011 high. In September, 180-day volatility on the crypto about matched the all-time low from October 2015. From that month’s average price, Bitcoin increased a little over 50x to the peak in 2017.”

While yields across the global economic environment have seen record-lows in the past year, more and more investors have started to take note of Bitcoin and this led to momentum for its adoption.

“Adoption iterations for Bitcoin have entered a unique state of human nature that supports the crypto’s ascent, in our view. Money managers reluctant to cross the Rubicon and allocate at least a small portion of funds may be at risk as Bitcoin simply does more of the same, advancing in price amid unprecedented low interest rates and elevated equities,” Mc Glone reports.

Bloomberg further highlights the dichotomy between the recent performance of bitcoin against the performance of gold:

“In addition to plenty of maturation potential for nascent Bitcoin, the crypto has a clear edge that should further pressure its volatility vs. gold’s — Bitcoin supply is fixed. Mainstream adoption and higher prices are increasing depth, which suppresses volatility and risk measures.” 

 Bloomberg concludes that Bitcoin is gradually replacing its monetary predecessor gold as a preferred reserve asset in investor portfolios and emphasizes the superior properties of Bitcoin in contrast to gold:

“The adage that money flows to where it’s treated best describes what we see as firming underpinnings for the price of Bitcoin. It’s not necessarily bearish for gold, which is backing into layers of support below $1,700 an ounce, but most indicators show a shifting global tide that favors the nascent digital currency as a reserve asset.”

“Bitcoin’s relationship to gold is similar to 2016, when the metal peaked just below $1,400 an ounce and the crypto launched toward its 2017 peak. A key difference this time is that Bitcoin is rising in value and less speculative, underpinned by greater adoption. It was the world’s largest automaker by market cap (Tesla) announcing the diversification of some of its equity wealth into the crypto that allowed Bitcoin to breach $40,000 resistance.”