Ever since Bitcoin had its monumental rally towards the back end of 2017 and topped the $20,000 mark people have been wondering when Bitocin will get back to those levels again. The coin has struggled to stay above even half that with it only pushing towards $14,000 the last potential rally.
However, predictions from Bloomberg point to positivity for the price of the asset this year for a number of factors both for Bitcoin, and for external factors that coil impact it.
The report from Bloomberg suggests that the COVID-19 pandemic has accelerated Bitcoin’s maturation as an asset, showing its strength amid declining equities. More so, there is an outline on the increasing desire by institutional investors, and Grayscale, in particular, which has been consuming about 25% of the new supply.
Greyscale sensing something
The uptake from Grayscale, seen as one of the primary factors in the adoption of bitcoin in the institutional space, appears to be a sign of things to come as the fund has started making a major impact on the market of new coins coming in.
“So far this year, its increasing AUM has consumed about 25% of new Bitcoin-mined coins vs. less than 10% in 2019. Our graphic depicts the rapidly rising 30-day average of GBTC AUM near 340,000 in Bitcoin equivalents, about 2% of total supply. About two years ago, it accounted for 1%.”
Bloomberg also finds the narrowing of GBTC/BTC premium a telling sign:
“The steadily declining premium in GBTC despite strong inflows indicates supply being taken off the market, and maturation. On a 30-day average basis, the Trust’s 20% premium over its underlying net asset value compares with the historical mean of 39%.”
Upwards of $28,000
All these positive factors around Bitocin this year, and at a time when the external markets are in strife and the safe haven narrative for Bitocin is growing, has led Bloomberg to state:
“something needs to go really wrong” for Bitcoin not to increase in value. Then it states that it will approach a 2017 high of $20,000 and may even reach a new high of $28,000:
“Last year, the high was about $14,000, which would translate into almost double in 2020 if rotating within the recent band, and mean little in the big picture.”