A report from the managing director of America’s Citibank has tipped Bitcoin to trade at around $318,000 by the end of 2021.
As reported by yahoo.finance, the report was shared by a Twitter user named ClassicMacro on Saturday in a thread that contained a number of screenshots of key points in documents bearing the Citibank logo and containing disclaimers that the information is intended for use by its institutional clients only.
Gemini cryptocurrency firm co-founder Tyler Winklevoss also made reference to the report in a separate Tweet, telling the cryptocurrency community to ‘buckle up!’ for the ride to $318,000 per Bitcoin:
Bitcoin: 21st Century Gold
Thomas Fitzpatrick, the managing director at Citibank, addresses readers in the document and unpacked the bank’s research and prediction for the cryptocurrency space and Bitcoin’s value over the next few years.
“The whole existence of Bitcoin has been characterised by unthinkable rallies followed by painful corrections (The type of pattern that sustains a long term trend.),” Fitzpatrick wrote in the opening paragraph of the section titled: Bitcoin: 21st Century Gold.
The report then unpacks how Bitcoin’s price performance mirrors that of Gold in the 1970s after it ‘was allowed to float’ following a 50 year period where it’s price had remained between $20-$35 an ounce.
Fitzpatrick then unpacked why he sees a bright future for Bitcoin given the similarities it has with gold.
“Bitcoin is the new Gold – It is an asset with limited supply. It is digital (This is the 21st century – Gold is a 20th century asset). It moves across borders easily and ownership is opaque. This last point is, I believe, very relevant. The huge fiscal deterioration of today has a cost in the future, either directly or indirectly. Directly it is that at some point the ‘bills have to be paid’ which means at some time in the future the money needs to be found. While Bitcoin may become subject to more regulatory constraints going forward it is a natural store of ‘money’ to avoid this. Indirectly the argument can be the debasement of FIAT currencies by creating high nominal growth and inflation (effectively a soft default – I do not believe hard default, particularly in the World’s reserve currency is a real concern. However in lesser currencies it could well be).”
He also adds that central banks are continue to discuss digitisation of currencies, and the potential upside for Bitcoin as the 21st century digital equivalent of gold in the 20th century means as major monetary system change is on the horizon.
Perhaps most compelling is Fitzpatrick’s argument for the value of Bitcoin to soar over $300,000 in the next 12 months. He attaches a Bitcoin price chart with corresponding reasoning behind a rally over the next year.
“You look at price action being much more symmetrical over the past 7 years or so (while still huge numbers) forming what looks like a very well defined channel giving us an up move of similar timeframe to the last rally (2017). Such an argument would suggest that this move could potentially peak in December 2021, at the high of the channel, suggesting a move as high as $318k. Improbably though that seems it would only be a low to high rally of 102 times (the weakest rally so far in percentage terms) at a point where the arguments in favour of Bitcoin could well be at their most persuasive ever.”