Bitcoin didn’t have the best second half of 2019, plunging from a year-to-date high of $14,000 in June to $7,400, where it sits as of the time of writing this. At its lows, the cryptocurrency fell as low as $6,600, languishing as BTC buyers failed to step in amid selling pressure seemingly catalyzed by Chinese regulation of digital assets and the operators of a multi-billion dollar Bitcoin scam selling their coins.
Despite the harrowing backdrop, Bloomberg’s Mike McGlone of the business media giant’s Intelligence unit believes that Bitcoin has a positive outlook heading into “2020 and the next decade” due to a confluence of factors.
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This confluence, McGlone went as far as to say, could bring the cryptocurrency back into the five-digit range in the near future, which would be a welcome surprise for many investors in the industry, who has begun to think that Bitcoin has reentered a “Crypto Winter” state yet again.
Bitcoin to Run to $10,000?
Bloomberg’s McGlone believes that the bull case for Bitcoin is rapidly building, as long as the key support of $6,500 holds in the near future. In fact, the analyst went as far as to say that it is “only a matter of time” before BTC breaks the key resistance at $10,000. Why, you ask? Well, the Bloomberg analyst gave a confluence of reasons:
Firstly, he drew attention to the fact that as gold rallies, so too should Bitcoin. While the precious metal is currently trending lower, having peaked last summer in the midst of the trade war talks, the macro picture may start to favor gold (and thus Bitcoin) heading into 2020; a potential recession, restart of the trade war due to Hong Kong and Xinjiang regulations, and other underlying issues in the traditional system could boost alternative assets.
Secondly, McGlone opined that a perfect storm is building for the cryptocurrency in terms of its “basic premises” — mass adoption and a fixed supply cap. “Bitcoin is winning the adoption race among crypto assets and is becoming increasingly scarce, which favors price appreciation. Plenty can go wrong with a nascent asset, but unless the basic premises reverse, there’s a higher probability to sustain price appreciation vs. depreciation,” he wrote, in a seeming bid to support the idea that the halving will act as a negative supply shock to a market predicated on simple supply-demand economics.
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Other Analysts Believe Bull Case Intact Too
It isn’t only McGlone who thinks that Bitcoin will have a positive skew heading into the coming year.
Fundstrat Global Advisors’ Thomas Lee recently took to CNBC’s “Market Alert” segment to talk about the latest going-ons in the stock and cryptocurrency markets. The host took some time to ask about Bitcoin, especially in regards to if the analyst believes that the bearish bias that has developed since June will continue into 2020.
Lee disagreed, stating that he expects for 2020 to be positive for Bitcoin. He specifically drew attention to three positive factors that are likely to push BTC higher heading into the coming year:
- The strong growth in U.S. equities, namely the S&P 500, implies that investors will soon start allocating more capital to risk-on investments like Bitcoin and cryptocurrency; Lee noted that his company has observed that there is a correlation between strong performances in the price of Bitcoin and the S&P 500 index.
- BItcoin’s block reward reduction, also known as the “halving” or “halvening” in reference to the fact that Bitcoin’s inflation gets cut in half during these events, is coming up in six months’ time. Lee thinks that this could be of benefit to BTC investors, as the event acts as a large negative supply shock in a market that analysts say is seeing increasing demand over time.
- And lastly, the Fundstrat executive thinks that while China has taken a harsh stance towards Bitcoin thus far, authorities in China remain pro-digital assets because they are pro-blockchain.
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